Dialogue Group, the leading provider of A2P SMS traffic monetisation software and services, last night hosted an exclusive invite only event during CommunicAsia where a representative discussed prominent trends affecting the A2P SMS landscape and what this means for mobile network operators.
As A2P (Application-to-Person) messaging has continued its journey away from its ultra-commoditised, grey route heritage and started to become a significant component of operator revenues, four prominent trends have emerged: Undeniable growth upward, pricing, importance to subscribers, and fraudulent activities.
Prices are rising as A2P SMS enters a golden era, bringing the opportunity for mobile operators to generate new and sustainable A2P revenues. Speaking at the event was Richard Dodds, Global Director of Carrier Relations for Dialogue Group. He believes setting the right price point for A2P SMS access to your network is a critical stage in any A2P messaging project.
"With revenues generated from A2P SMS set to exceed those generated from P2P (Person-to-Person) SMS in 2015, setting the wrong price point can ultimately lead to a project failure in the short term, and if it is continually set too high, result in a spiralling decline in usage of A2P SMS," said Mr Dodds.
Dialogue Group's recently published whitepaper reveals that Western Europe and Oceania have among the highest prices for A2P messages compared to less developed markets that have the lowest prices. Asia is showing consistent growth in pricing, but is only just scratching the surface of opportunity for growth.
"There is huge variance in pricing for A2P messages across the globe, which reflects the diversity in regional and national markets," said Mr Dodds. "More mature mobile markets typically have greater pricing for A2P messaging while developing markets are typically among the cheapest."
The research discloses that an important reason for these increases in pricing is that operators are engaging with solutions to allow them to have greater control of the different routes they offer. In regions that are seeing the largest percentage rises, the move by operators to take back control of their A2P messaging traffic is apparent.
Dodds added: "There is a fine balance to be struck between operators' desires to turn A2P into a significant source of revenue and the price that senders will bear. It is clear that by paying greater attention to the A2P market and deploying software to control, filter and manage A2P traffic that operators can close security holes and increase the revenues they derive from A2P messaging services. "
Looking to the future, Dodds warns that if pricing continues to increase at an unsustainable level, the A2P messaging market may start to shrink within three to five years: "For operators, there's a temptation to offset the decrease in their traditional messaging revenues by pricing A2P messaging at three or more eurocents per message, this temptation must be avoided. If they charge these rates in the short term it will likely come at the expense of the A2P market in the long term as senders will look for and find alternative means of client interaction if the cost of A2P outstrips its worth."