CAMPBELL, Calif.--(BUSINESS WIRE)--Mblox, the global leader in application-to-person (A2P) text messaging, and Anam Technologies, the leading A2P revenue assurance partner for mobile operators, today announced the results from a global survey and SMS affordability analysis conducted by Ovum, which found that mobile network operators (MNOs) are not currently realizing full revenue or growth potential due to inappropriately pricing A2P SMS for each marketplace. The A2P SMS market is poised for significant adoption in the coming years, which provides MNOs an opportunity to increase revenues if the optimal SMS price is charged for each market and networks are closed to fraudulent routes.
The report, based on a global survey of enterprises and analysis of global SMS volumes, found a high level of price elasticity for A2P SMS. Specifically, half of respondents would send two to four times less traffic if the per-message price of an A2P SMS increased from the industry average of US$0.03 to US$0.05. Conversely, 33.9 percent of respondents said they would send between two and four times more traffic if the price was US$0.01.
“MNOs in every market should consider the effect of price elasticity on their pricing strategies for A2P SMS,” said Pamela Clark-Dickson, principal analyst, Consumer Services, Ovum. “Ovum estimates that A2P messaging traffic will total 2.2 trillion messages by 2017, representing 31.3 percent of total messaging traffic, up from 1.8 trillion messages in 2014.”
Additionally, the report highlighted the difference pricing strategies will have around the globe. For instance, MNOs in Belgium would more than double their revenues by reducing the price of A2P SMS by 25%. By contrast, MNOs in India currently charge below the optimal price. A price increase would cause a small drop in traffic but a windfall for the bottom line.
“This report underscores the impact pricing has on A2P SMS adoption and growth across the globe,” CEO of Mblox Tom Cotney said. “A2P SMS is poised for significant growth because it provides enterprises with a cost-effective channel for engaging with customers. This new study proves that adoption could increase and MNO revenue will be maximized, if MNOs can identify the optimal price point for their market.”
The report also reiterated that, in order to maximize revenue and enforce the optimal price point, MNOs must close their networks to fraudulent routes. Without commercial agreements, MNOs are losing a portion of revenue to messages sent over grey and black (fraudulent) routes, which bypass proper compensation for the MNOs. The most effective way MNOs have begun battling fraudulent routes is by deploying a managed SMS revenue assurance platform and SMS firewall, enabling them to close and protect their networks, identify legitimate traffic, block spam and ensure that aggregators and enterprises pay them for SMS services.
“For mobile network operators, deploying managed revenue assurance platforms and firewalls is a vital first step to realizing the full revenue potential of application-to-person SMS,” said Anam CEO Louise O’Sullivan. “These tools enable MNOs to be part of the value chain of an already robust A2P market. When combined with managed protection of the channel and pricing optimization efforts, mobile network operators can achieve maximum profits while ensuring adoption and utilization of application-to-person SMS within the business market.”
In order to help MNOs maximize revenues, Ovum partnered with Mblox and Anam to develop an Affordability Index for application-to-person SMS pricing. The index was created to enable MNOs on a per-country basis to visualize the impact that increasing or decreasing their application-to-person message prices would have on their revenue. Click here for the white paper reporting the full findings.
For the white paper, Ovum drew on primary research which was conducted over a number of months, comprising phone and face-to-face interviews with companies including Mblox, Anam, infrastructure vendors, SMS aggregators and telecommunications hubs.
Ovum conducted an online survey between October 15 – November 21, 2014. This survey was conducted independently by Ovum. The sample included enterprises based in all seven regions globally. Respondents were drawn from business/professional services, device vendors, manufacturing, financial services, media and internet companies, the public sector and app providers/OTTs.
In conjunction with Mblox and Anam, Ovum has also developed an Affordability Index for A2P SMS pricing, from which content was also drawn for the white paper.
Mblox is the largest independent application-to-person (A2P) mobile messaging provider in the world, trusted by more companies to carry their mission-critical traffic than any other service. As the industry’s most experienced Tier One SMS aggregator, Mblox specializes in the unique demands of large-scale mobile messaging programs and are known for providing reliable, uncompromising connections. By creating positive brand experiences, Mblox helps clients transform numbers into profitable relationships with their customers.
Anam Technologies’ expertise is in core SS7 technology and the company is a provider of the most innovative and intelligent mobile messaging security solutions available today. Anam Technologies’ team members have a wealth of experience in wireless messaging. Our aim is to offer service-oriented solutions which allow mobile operators provide an enriched and more secure messaging experience for their customers. Anam’s solutions are designed to be easily integrated into the network or deployed as cloud-based services.
Anam’s patent-protected SMS Home Router product forms the core of our solution portfolio and provides an intelligent transparent routing platform facilitating many services and applications in network and personal security, revenue assurance, personalization and message delivery engines.
Ovum is a leading global technology research and advisory firm. Through its 180 analysts worldwide it offers expert analysis and strategic insight across the IT, telecoms, and media industries. Founded in 1985, Ovum has one of the most experienced analyst teams in the industry and is a respected source of guidance for technology business leaders, CIOs, vendors, service providers, and regulators looking for comprehensive, accurate, and insightful market data, research, and consulting. With 23 offices across six continents, Ovum offers a truly global perspective on technology and media markets and provides thousands of clients with insight including workflow tools, forecasts, surveys, market assessments, technology audits, and opinion. In 2012, Ovum was jointly named Global Analyst Firm of the Year by the IIAR.
In addition, Ovum operates a large portfolio of technology conferences annually in Europe under the OvumLive events brand, presenting a more interactive opportunity to learn from its analysts. Its flagship event – Ovum Industry Congress – attracts over 300 end-user attendees every year.
Ovum is a division of Informa plc, one of the leading business and academic publishing and event organisers globally, headquartered in London. Informa is quoted on the London Stock Exchange.