It would be an understatement to say that Application-To-Person (A2P) messaging has been widely accepted as the most viable near-term monetization strategy for telecom operators. Indeed, the numbers are impressive-Ovum expects A2P traffic will touch 2.21 trillion messages per day in 2017, representing 31.3 per cent of total messaging traffic. Furthermore, Juniper estimates that the A2P SMS industry will be worth $60 billion by 2018.
Meanwhile, telecom operators themselves have enthusiastically jumped on to the A2P bandwagon. According to mobilesquared, a majority of mobile operators are witnessing year-over-year growth in A2P messaging, of between 6per cent-36 per cent, with 56 per cent of mobile operators registering a growth in A2P traffic in 2015, from 49 per cent in 2014.
Now, here’s where it gets a bit tricky. While operators are, indeed, pinning their hopes on A2P messaging, the reality is that this is a double-edged sword. Simply put, while the promise of revenue is real, so is the threat of increased spam and illegal messaging attacks on subscribers.What’s more, according to industry surveys, operators simply do not have a game plan handy to respond to the threat and as a result, are also losing out on monetization opportunities.
The Rise and Rise of Spam
So, how real is the threat, really? To illustrate, permit me to cite examples from mobilesquared’sSecure Networks Key to A2P Monetizationreport-spamming is considered the greatest network threat, followed by spoofing and virus distribution. In addition, as per industry reports, globally, spam accounts for 15 per cent of all SMS messages sent, which represents 1.2 trillion spam messages each year. Let’s break it down further.
Interestingly, the GSMA has identified the most common types of SMS-based spam as regular spam (unsolicited advertisements sent to subscribers), flooding (large amounts of traffic sent to disrupt services), faking (messages sent from an SMSC that fakes its own identity to avoid charging) and spoofing (messages sent with a fake MSISDN as originator to fool the recipient).
Let’s consider two region-centric examples-in the US, text messages have held their own, despite the growth of other categories. Needless to say, this medium is a prime target for telemarketers and fraudsters. The most commonly used form include free gift card offers, marketing promotions and phishing scams, and often lead to serious misuses of personal information and identity theft. Now, consider Egypt-with 96 million mobile subscribers and a mobile penetration rate of over 110 per cent, isn’t it mind-boggling to consider the volume of spam messages that circulate in Egypt, and all over the Middle East!
Spam and the Telecom Operator
Now,in the context of a mobile operator, the range and scope of SMSs sent increases to include operator-generated messages, which are typically controlled by different teams within the company. In a nutshell, these include: marketing of value added services (such as product promotions), advertisements via the operator’s business team (typically for a specific business, such as wireless, enterprise, etc), content provider-centric messages (for specific content) and location-based campaigns (depending upon the customer’s location). These messages are typically sent across various channels (depending upon the customer’s preference, of course), such as SMS, USSD, MMS, email, an interactive voice response, et all.
The question now is-why does the customer dismiss these messages as spam, despite being from a legitimate source (i.e. the operator)?The simple answer is-because, in reality, the operator doesn’t have control over these messages. Well, not in a centralized manner in any case. The catch here is that these messages are sent in an independent fashion, depending upon the channel being deployed and the purpose for which it is being sent. In other words, picture several communication platforms, all operating independently of each other and all viewing a particular set of subscribers in a “siloed” fashion. At the end of the day, each of these platforms are more than likely to send multiple and frequent message to the same set of subscribers, thereby doing nothing to ensure customer stickiness. Quite the opposite in fact-the customer is likely to be very annoyed. Another downside of this is that more often than not, a large chunk of one’s subscriber base is left unaddressed. Clearly not an advantageous situation for any telecom operator!
Let’s move on to the impact spam will have on an operator’s overall locus standi. Bombarding the customer’s inbox with SMS spam is more than likely to lead to increased customer complaints, brand erosion and customer churn. Similarly, sending fraudulent messages like promising a subscriber large sums of money is likely to lead to financial losses for both, not to mention that the customer will likely lose faith in the operator completely (along with other sensitive information)! Illegal bulk messaging is another sure-shot way for the operator to lose the customer-and pay a hefty fine to the regulator, to boot!
Last, but certainly not the least is the problem of grey routes. Now, going back to my original point, this is the main reason why operators will NOT be able to effectively monetize the A2P opportunity. How? Simply because grey routes account for 66 per cent of A2P network traffic, according to mobilesquared’s report. Many operators lack visibility into grey route traffic, because the tools to monitor and filter the message types traversing their networks aren’t available. This naturally adversely impacts an operator’s monetization efforts, making grey routes an attractive option for low-cost SMS aggregators with no commercial agreements with destination operators. The result? Revenue loss for the operator.
Just an interesting aside into the actual depth of the issue-according to mobilesquared, only 33 per cent of mobile operators are able to monetize A2P messaging, leaving the rest on the table. Imagine the possibilities!
So, what can an operator do to tackle this issue? Well, the commonly held view is that implementing an SMS Firewall can help contain the damage to some degree! According to industry surveys, it can help operators secure their networks and generate revenues from legitimate A2P use cases.
From our huge deployment base of messaging and firewall solutions, we have found that key reason for adopting SMS firewall solutions in the past has been network security, anti-spam and/or fraud prevention, but we are seeing a shift in that thinking and customers are now expanding and investing such systems for A2P messaging monetization.
Secondly, along with the firewall solution, operators are now looking for a comprehensive and unified policy control solution for the complete messaging infra across all channels and use-cases. This combined approach of a firewall plus a central policy control is the way for the future for enhanced customer experience for the subscribers.
Operators need to ensure that the “SMSBOX” doesn’t become “SpamBox” and is ignored by the subscribers and taken over by Over-The-Top players such as WhatsApp completely.
