The Resurrection of SMS

In May we participated in the International Telecoms Week in Chicago, the biggest global event of the industry this spring. We were there to introduce our services as a wholesale and SIP trunking provider, but also to learn about the most recent trends of our industry. Here are the key takeaways on messaging, which was the main subject of day 0.

Take care of P2P, but prepare for A2P

The first panel launched with a real hot topic: the future of A2P messaging. It’s better to understand A2P if you know the other segments of the market: P2A (Person to Application), and P2P (Person to Person). This latter one is really simple: you send a message to your friend and he / she answers to you. However, starting with SMS long ago, OTT applications (Over The Top – like Messenger, Whatsup, Viber, etc.) entirely took over this market, firstly because they were free of charge and secondly OTT apps also offered enhanced features.

Just take a look at your SMS inbox, you barely find a message from anyone close to you nowadays. Rather you’ll see messages from your bank, your insurance company, your Mobile Network Operator (MNO), a webshop or from a transportation company. Those messages are called A2P messages, generated by an automated service or an application for you with important information you need regarding a purchase or a service. This market is huge and is experiencing a massive growth by an annual rate of 4.2%, reaching 2.2 trillion (2 200 billion) automated messages / year, and an annual volume of $ 85 billion by 2025.

Go for the trusted routes

Our panelists (Anurag Aggarwal – Messaging Director, Tata Communications; Peter Lager – CEO, ARPTEL; Robert Rose – CTO, GMS; Dimitris Rokos – CEO, AMD Telecom) were sharing their thoughts about the role and the challenges of MNO-s to protect their A2P market ie. how they should fight against greyrouting, how to engage with mobile network against OTT, how to use SMS firewalls, etc. and about the most closely concerned sectors.

For me the interesting part was that all of them agreed that most of the MNO-s should be educated to start getting to know what’s going on on their own networks, meaning that today MNO’s don’t really know which part of their message traffic is A2P, which comes from greyroutes, while the 30% is delivered via greyroute! How could you keep your wallet tidy if you don’t know what’s inside? So MNO’s need to do the following: 

• have more trusted routes,
• do SMS testing, and
• they should install SMS firewalls.

By applying firewalls, they could spare $2 bn on every 1 mn subscribers, annually. However, another shocking thing is that after investing a lot in firewalls, most of the MNO’s don’t know how to use the stuff properly, so they need education on that as well – Anurag said.

Don’t forget about GDPR

Yes, America is almost as much concerned as we are in the EU. GDPR is affecting the A2P sector pretty deeply: due to the 98% opening rate of the SMS against the 20% of the e-mail, it’s highly recommended to involve SMS in the opt-in process – Dimitri Rokos said. In result, you can keep multiple times more users on your lists, than just using the e-mail channel. In our opinion, you should do an automated sequence of action to maximize the opt-in rate of your users: an e-mail first, then a second e-mail as a reminder, then a reminder via SMS, and in the end an automated call for those who haven’t opted in so far (if you don’t know whom to ask for such an automated service, we’ll be kindly at your service).

The keyword is RCS

Regarding the main A2P industries, there are no surprises: finance, retail, and e-commerce will remain the leading ones in the long term as well. At this point, Mr. Rokos has mentioned the magic acronym of the future of messaging: RCS. RCS as the savior of the A2P market for MNO’s. Why it is so? Because of RCS capabilities, it’s worth investing in the usage of A2P channels for content providers to generate revenue.

To understand this, we have to examine RCS much closer, which we are going to do in our next post. Until then, just keep in mind these three letters, they are going to change the world.