by Mark Page, VP of Sales and Purchasing at TMT Analysis.
Business messaging has become a hot ticket, a very hot ticket. In fact, it’s glowing white right now.
For proof, look no further than the valuations of some of the largest global messaging players. Juniper Research forecast that come 2024 there will be over two trillion A2P SMS transactions annually. For the next few years at least then, that figure is clearly heading upwards.
SMS is inching towards its 30th birthday and whilst over-the-top (OTT) players like WhatsApp, WeChat, Viber, Telegram and Signal are really squeezing mobile network operators’ (MNO) person-to-person (P2P) voice and SMS revenues like a hydraulic press, and with roaming revenues tanking globally due to hardly any international travel, A2P SMS is proving to be a nice little diamond in the rough right now for those MNOs who have switched on to the opportunity.
Use cases for A2P SMS may range across the areas of marketing, transactional and informative, but it’s the transactional side of things that is the real engine room. And underpinning much of that growth are messages carrying two-factor authentication (2FA) credentials.
Over the years we’ve seen many MNOs wake up to the benefits of securing and monetising their SMS channels. On the face of it this can only be positive but look a little deeper and it’s easy to see numerous examples of operators looking at new opportunities to increase their revenues. Pricing, for example, for international SMS can be hundreds of per cent higher than domestic traffic and this is leading to many organisations to look for channels beyond SMS for 2FA purposes. Talk about killing the golden goose…
SMS might be a little long in the tooth but voice in comparison is positively ancient; it’s 145 years since Alexander Graham Bell demonstrated his ability to “talk with electricity” by transmitting a call to his assistant, Thomas Watson. The first words transmitted were “Mr Watson, come here. I want to see you”. Telephony captured the imagination of the world and took it by storm. The rest as they say – whoever ‘they’ are – is history.
Voice in the form of text-to-speech is proving to be a legitimate alternative means of delivering content such as one-time passwords (OTPs) but whilst the temptation to do so (reducing costs compared with SMS for the most part) can be strong, the customer experience is impacted, often sub-optimal. Text-to-speech takes longer to deliver the same content than a text delivery. Also, many MNOs are really starting to clamp down on aggressive usage of this and adjusting their voice commercial models to make this less attractive. But there is one more thing in the voice world which can really hurt an operator’s bottom line, now really coming to the fore – flash calling.
Flash calling can seriously hurt MNO A2P revenues as it uses a missed call (with no answer) to the recipient’s handset to verify their number. A phone call is placed with the authentication code embedded in the caller ID sent to the user’s phone. There is no need for the user to to answer the call so there is no cost associated with the call. Their revenues risk quite literally disappearing in front of their eyes within a flash plus this can all open up a host of security issues too. None of this is exactly stellar news for operators I’m sure you’ll agree.