As mentioned in our recent blog post, MNOs have a few options to support their A2P Messaging strategies. The option chosen will determine the level of benefits gained. While aggregators play an important role in the ecosystem, technology, software, and market conditions have led to the rise of additional models when MNOs seek to capitalize on the A2P Messaging opportunity.
As a supplier of business-enabling and intelligent routing solutions for the MNO community, TOMIA has a front-row seat to observe these trends and the various ways in which MNOs can execute their strategies. Unquestionably, MNOs have their own, unique approach to solving these problems, but some commonality exists.
The models we see MNOs in pursuing their A2P strategies can be summarized as: Outsourcing, Integration, Build Your Own.
The first, and most common model for handling A2P traffic is the outsourcing model. Though numerous variations exist, in this model, the MNO partners work with an aggregator to monetize the MNOs’ subscriber base, while seeking to onboard the key enterprise accounts. This model is well-established and has a low burden of work for the MNOs. The challenge, however, is that this model tends to also limit the revenue growth potential for the MNO. It also comes with numerous disadvantages such as a race-to-the-bottom pricing model, which consequently diminishes the value of the MNO’s subscribers, and difficulty for MNOs to develop new business models. Considering the opportunity for growth presented by the enterprise business market, MNOs have started to realize the potential revenue they can gain by playing a more active role.
The second approach we have seen is the integrator model. Although very similar to aggregators, the Integrator approach allows the MNOs to piece together the key partners with which they will do business. Rather than “all” of the A2P solution being provided by one or two software suppliers, in this model, the MNO pulls together best-of-breed companies to execute their strategies. There is still a high reliance on 3rd parties, but in this case, more value is maintained by the MNO, as is the design and execution of their business. Even with only partial control, MNOs can benefit from this approach and enable positive revenue growth.
A few leading MNOs have taken further steps and built their own infrastructure and operations team to support the A2P messaging business. In this situation, the MNO now owns and operates all (or almost all) of the infrastructure required to operate in this complex market. The MNO defines value directly for its subscribers and enterprises, controls their B2B relationships, pricing, routing costs, billing of the on-net and inter-operator traffic, and manages everything through a robust OSS/BSS solution. In some cases, the MNO may evolve to be an aggregator with sales and marketing teams focused on selling to other MNOs for traffic. Or, as we have seen with large MNO groups, handle the business of their affiliates and related OpCos. Ultimately, by investing in this way, MNOs are focusing on reclaiming their ownership of the messaging ecosystem previously ceded to Aggregators and Integrators. By not acting now, they will see a continuous devaluation of their network offering and control loss of their customer experience. At the same time, MNOs are seeking to gain more efficiencies to participate in A2P messaging, decrease the cost of service, and maximize margins.
To learn more about how TOMIA can support your A2P messaging strategy, please contact us at: marketing@tomiaglobal.com