A2P Messaging offers MNOs an opportunity to increase their revenues and support enterprises to establish a continuous dialog with their customers. Many enterprises have gone through an intense digital transformation driven by the COVID-19 pandemic, not only to allow teleworking of their employees but to assure business continuity. In this environment, Enterprises have been seeking new ways of conducting their business in a world where customers are increasingly dispersed geographically. Adding to this complex situation, an abundance of use cases relies on mobile business messaging, or A2P (Application to Person) messaging to ensure successful and meaningful communications and interaction.
A2P Messaging presents the most powerful and trusted communication channel to connect with mobile consumers. This communication model enables new sales, builds trust, reinforces an enterprise’s brand, and ultimately, ensures successful customer relationships and retention. These trends are happening across a wide range of industries, such as healthcare, finance, security, and many others.
Verified Market Research predicts growth of 4,4% CAGR in the A2P SMS market growing to $90B by 2027. This trend demonstrates that the enterprise messaging business is already more worth than the P2P messaging market, which is one reason why Mobile Network Operators (MNOs) are seeking to capitalize as soon as possible.
With the rise of A2P messaging use cases, MNOs are faced with a decision regarding their business models and how they want to be positioned in the A2P messaging value chain. Questions range from whether to outsource or insource, what infrastructure and software investments should be made and everything in between. MNOs must also consider a multitude of factors including their speed to market, short and longer-term profitability, and the agility to adapt and change with the market and business conditions.
The A2P Messaging value chain is complex and includes many types of players. Traditionally, enterprises have chosen messaging Aggregators to handle their business messages. Fully outsourcing the service delivery to Aggregators is still the first (and only) move by many MNOs and offers a sure way to manage the MNO’s A2P traffic. This option, while enabling business and some revenue growth has significant long-term issues with one of the most critical being that the business upside belongs more to the Aggregator as the primary beneficiary.
Given the trends that we see in A2P Messaging and continued market potential, (which will only increase after the pandemic due to the continuous investments from enterprises in online services), MNOs are seeking ways to better maximize their role in supporting a digital ecosystem. Some are already exploring variations of the traditional business model, which increases the value of their network capabilities and customer base. In simple words, MNOs want to control the A2P message delivery and reap the benefits of efficient routing, and their own customer experience. Building their own A2P Messaging platform is just one alternative among other options.
In our next blog, we look at the different model options and discuss their relative advantages, including the revenue potential.
To learn more about how TOMIA can support your A2P messaging strategy, please contact us at: marketing@tomiaglobal.com