CREATE: The engine of any successful A2P monetisation strategy is powered by its capacity to generate new business models
Revving up addressable revenue – from both existing and innovative use cases – is only effective when MNOs have the real-time categorisation capabilities to adopt flexible pricing.
Surging A2P SMS messaging usage – across a multitude of industries – has brought with it a vibrant and imaginative range of services and opportunities.
As A2P communication has gained ever-more traction as the key medium for the dissemination of content and information, embracing this channel has become an increasing necessity for brands.
Yet as millions of global institutions and firms adopt the messaging system as a conduit for countless value-added-services, vast numbers of mobile network operators are still failing to capitalise on its true business value.
In the face of this stasis, MNOs are at a crossroads. On one side, lies a route to A2P monetisation success – with carriers able to CREATE new revenue drivers and charging strategies to dramatically boost the paid-messaging volumes on their network.
On the other – burying their heads in the sand and watching as the great 21st century A2P boomtown passes them by.
Latest market valuations have forecast A2P to soar to even-greater heights than previously anticipated – with global enterprise A2P demand now projected to reach $100.1 billion by the end of 2028.
Factors – such as A2Ps high open rates and its trusted, secure reputation – have propelled demand as more businesses adopt digitalisation and prioritise customer engagement.
Yet cellular carriers attempting to increase business messaging revenues have tended to either engage in more fixed-price deals with aggregators, accepting marginal returns. Or attempt to jack up prices themselves – which frequently results in both cannibalisation of existing revenues and grey-route traffic issues.
Neither are effective strategies for A2P revenue optimisation.
A far better path lies in adopting a tried-and-tested A2P monetisation strategy, that not only maximises the total addressable revenue that MNOs COULD be generating from SMS traffic – but also has the agility to add new services as the channel evolves.
At HAUD – one of the world’s leading strategic partners in effective A2P monetisation – we base our strategy around PACE: Protect, Action, Create and Execute.
As explained here, Protect refers to the crucial first step of installing a next-generation SMS firewall, guarding against revenue leakage via grey route messaging fraud and spam.
A progressive tech-filtered firewall enables both 360 degree real-time visibility and categorization over the ATP and RCS traffic passing through a carrier’s airwaves – vital for later monetisation.
The second step is ‘Action’. After illegitimate messages are bundled together, gaps in remaining traffic – many of which equate to missed revenue opportunities – can be addressed.
With the first two elements in place – Protect and Action – we come to the third: Create.
Creating new revenue then essentially consists of two overriding strategies. The first is ensuring networks are maximising the true market value of messages they are currently delivering to end users.
By combining a next-generation firewall with a powerful SMS monetisation tool – such as HAUD’s industry-leading Smart XChange – MNOs can start to differentiate between messages passing over their airwaves, adopting bespoke charging structures accordingly.
Inherent in this process is the acknowledgement that certain types of message are more valuable to businesses than others, and charging should be optimised using a multi-tiered approach.
Messages can be differentiated according to message type – eg: SMS, MMS, RCS and USSD – but also by destination (local, national or international), network, and volumes per client.
And then there are timing and priority distinctions. A banking 2FA message requires immediate delivery – so could be charged at a much higher rate, for instance, reflecting its role as a security-critical SMS.
A marketing message from a pizza restaurant does not have the same time-sensitive criticality. It could be sent ‘off-peak’ and charged at a lesser rate.
And then there is variation in messaging content. A vast range of multimedia messages – including graphics and video – contribute to greater customer engagement, so pricing should reflect these distinctions.
As HAUD’s Head of Global Market Intelligence, Joanna Kuligowska, explained at 2022’s Mobile World Conference, a lack of flexible SMS pricing in the A2P market has led to global price rises and incentivised bypass.
She added: “HAUD’s solution is to take the advanced visibility enabled by a next generation firewall to ensure all traffic is charged correctly in accordance with an operator’s monetisation strategy of choice.
“MNOs can then work directly with brands to incentivise and stimulate traffic streams – including many new ones.”
Which brings us to the second overriding MRO creation strategy – the invention of new business models.
Highly intuitive monetisation platforms like HAUD’s – when combined with human strategic capabilities – produce data insights that both identify opportunities and conduct margin analysis.
Valuable databases can be created from these insights, which, with full-permission of end-users, can be monetised to brands seeking to connect with customers around specific needs.
This consent-based monetisation of subscriber information enables MNOs to create new value propositions and client channels – while ensuring networks don’t cannibalise existing revenue streams.
And for cellular carriers daunted by this process, experienced Revenue-as-a-Service (RaaS) operators like HAUD can provide everything they need through a wholesale ‘team-in-a-box.’
“HAUD can airdrop into your business and bring all the expertise you need to defend and create new A2P revenue” explained Kuligowska.
“A2P is a sleeping giant, so MNOs typically don’t have resources in place to effectively monetise the channel.
“Rather than retrain or hire staff, we will parachute into your business and combine human insights with advanced automation to provide a truly holistic MRO solution.”
Revenue creation is the third propulsive force needed to send profits skyward – for cellular carriers ready to be part of the global A2P phenomenon.
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