The telecom sector’s increasing focus on digitization has created a plethora of challenges and opportunities for enterprises.

One recent McKinsey report showed that 70 per cent of customers rate their purchase experience based on the how a brand engages with them. Elsewhere, Forrester Research has stated that a 10 per cent improvement in a company’s customer experience score can translate into a $1 billion plus impact on revenue.

 Where once enterprises largely deployed SMS or email to engage their customers, now there are many more options and consumer preferences with MMS, push messaging and newer channels like chat apps…”

It follows that businesses now need to aim at ensuring constant customer engagement.

In this context it’s unsurprising that the mobile device has emerged as the primary tool in the engagement process. And today, with a 90 per cent open-rate, it is enterprise or A2P SMS that both endures as the most reliable channel to achieve consumer engagement and going forward shows the most opportunity for growth.

To give that some context, A2P messaging is already widely used across a range of industry sectors:

• Retail (order confirmation, delivery dispatches, delivery updates)
• Finance (alerts, transaction verifications)
• Transport (freight/asset monitoring, delivery tracking, connected car, navigation, ticketing)
• Healthcare (clinic search, test results, information dissemination)
• Logistics (tracking shipments, delivery times, pick-ups and delays)

And as the A2P market gains traction, new use cases and sectors are coming to the fore. These include interactive surveys, social media-based communication, multi-channel marketing campaigns and more. At the other end of the spectrum, financial uses such as one-time passwords (OTP) and natural disaster alerts are registering significant uptake.

At the same, consumers have diverse preferences when it comes to digital engagement. Where once enterprises largely deployed SMS or email to engage their customers, now there are many more options with MMS, push messaging and newer channels like chat apps and other IP based forms of communication which are gaining traction in markets with high a penetration of smartphones and high-bandwidth network capabilities.

Enterprises that are dependent on standalone platforms for SMS, USSD, or over-the-top services find it difficult to move from one channel to another.

Yet the diversity of messaging platforms is in fact an advantage for enterprises because new multi-channel solutions, such as Mahindra Comviva’s Ngage, have simplified the creation and delivery of the messaging process by providing tools that allow personalised targeting, control and filtering of unwanted messages and strict adherence to existing contact policies across a range of messaging options.

And crucially, by providing a range of messaging channels, usually SMS, USSD and MMS, enterprises and operators are able to offer their customers choice over their preferred channel of communication, ie, taking a customer centric view. Typically that breaks down as: SMS (75-85 per cent), USSD (10-15 per cent), MMS (5-10 per cent).

The multi-channel approach results in a more engaged consumer with a 15-20 per cent increase in campaign effectiveness.

 …enterprises will still continue to use SMS as a channel for critical and high priority notification and authentication because it is reliable, ubiquitous and unlike OTT messaging doesn’t require the user to own a smartphone or a 4G or WiFi network for its operation.”

Fraud, trust and revenue leakage

Mobile intelligence firm, Mobilesquared, recent report on the enterprise messaging market indicates that the market value of A2P messaging was $12.88 billion in 2015 and forecasts it to grow to $58.75 billion by 2020.

Yet before revenue from A2P messaging is leveraged to the fullest, challenges such as grey routes (where an operator’s P2P messaging network is used for A2P messaging services) need to be tackled.

Since P2P SMS is economical, it can be purchased and used for grey route A2P services. In absence of any binding agreement, revenues are accrued only by operators whose network is used for message termination. The operator on whose network the message was fraudulently initiated loses revenue.

Grey routes are a growing concern for operators, and they have to continuously evolve their learning methods to safeguard their network against grey routes and other fraud mechanisms.

Whilst strict regulation and compliance will help reduce the intensity of the problem, grey routes are loopholes that will continue to exist. Operators must invest in end-end security solutions that will identify and analyse grey routes, and ring fence the network to curb them by supporting subscriber centric communication policies.

Mobilesquared estimates that as much as 65 per cent of the A2P market is operated as grey route traffic and that figure will drop to 19 per cent with the roll-out of next-generation SMS revenue assurance platforms. In other words, the drop in grey route traffic alone will help drive operator revenue in the messaging ecosystem.

In addition to revenue leakage, the volume of spam messages continues to increase. And whilst spam utilizes tremendous network capacity, as well as cost in the form of termination fees, it is also an annoyance to consumers whom are in danger of becoming increasingly alienated from the messaging process.

Best practice and the future

The security provided by mobile networks, the rising penetration of mobile phones combined with the high open rates of SMS messages continues to fuel the uptake of A2P messaging. However, without a clear picture of grey route traffic, it is likely that mobile operators will lose out to SMS aggregators.

As a measure to build out enterprise messaging its therefore imperative to employ strong anti-spam platforms, that both enable the deployment of multi-channel messaging and adhere to regulation.

Aditya Dhruva

Head of Messaging and Broadband

Mahindra Comviva

  

Furthermore, whilst today chat apps and OTT messaging are largely a P2P endeavour, in the coming months and years many of these players will seek ways of opening their API’s for the enterprise messaging market.
This will allow enterprises to focus on applications, push notifications and other IP based communication.

However, enterprises will still continue to use SMS as a channel for critical and high priority notification and authentication because it is reliable, ubiquitous and unlike OTT messaging doesn’t require the user to own a smartphone or a 4G or WiFi network for its operation.