Next Generation firewalls are called next generation for a reason.

The days of the SMS network defender simply stopping malicious messaging are long gone – because while they have undoubtedly got fantastically better at that role, it’s all the other stuff they do that makes them a valuable asset.

Put simply, next gen firewalls give MNO’s the insight they need to properly modernise and monetise their A2P SMS traffic by giving them granular levels of detail about who is sending messages across their network, and what the purpose of those messages is.

As Ron explains, that then enables AI data-driven strategy to be designed – both in terms of differentiated, flexible pricing, and in terms of incentivising brands brands to use the channel.

He said: “So, say for example, you see a big brand sending three different types of SMS messages to their customers. Because with a next gen firewall an MNO can see the type, purpose and volume of these messages, they can build tailored pricing for this brand as they better understand their use cases and the messaging value.

“So, they might charge 9 cents for an OTP – reflecting its time-critical security value and the big potential downside for the brand if this goes wrong.

“Then, they might charge 3 cents for an abandoned cart notification – reflecting that this is still a potentially valuable transaction the SMS is helping to enable.

“Finally, they might charge 1 cent for a marketing promotional message – again reflecting its less valuable transaction rate for the brand.

“But even here there can be further complexity – depending on elements like the individual brand, its size and the customer base it wants to send to.”

This last bit is critical if the industry as a whole is to reach its multi-billion dollar uplift potential. Given only 10% of businesses currently use A2P SMS, enticing smaller brands into the market, with demonstrable ROI on SMS spend, will be key – and differentiated pricing allows for that flexibility in brand messaging and spend.

But managing any kind of direct to market A2P SMS service has long been something MNO’s have retreated from. Because of the sheer number of brands and campaigns wanting to reach customers, the industry has evolved into one of wholesale partners, aggregating messages and sending through the network via a single entry point and a fixed volume-based fee.

For Joanna, it’s now too big of a missed revenue opportunity for MNO’s to continue using this flat price system – and yet, it doesn’t need to mean the end of the wholesale partnership.

She said: “The solution here is technology really.

“Takes HAUDs pricing technology Smart Charge. It’s simple and largely automatic – so there’s little opex spend on headcount, but massive revenue potential for doing it.”

She explained how coupled to the next gen firewall, it can automatically assign pricing to messaging categorisation parameters and bill client brands directly in real time. So a small wholesale team can go after new customers with new use cases in a profitable and efficient way.

Meanwhile, it enables more of a revenue-share and transparent relationship with wholesale partners and their often usual international brand customers – driving up total volumes and pricing traffic correctly.

Joanna concluded: “I think MNO’s really have to, in a way, stop looking at simply increasing rates as the only way to increase the revenues coming from the SMS channel.

“They have to be strategic, data-driven, and to increase the elasticity in their pricing models to reflect both the value of the message, and the changes that are happening in the market and wider messaging ecosystem.

“I mean, for a lot of MNO’s, their pricing model is often as outdated as the technology of SMS itself – and yet, the market for A2P has evolved, and is continuing to evolve, so fast – operators need to evolve their SMS strategies too to keep pace and take full advantage of the market explosion.”

Which is a good segue-way into our next chapter – innovating use cases for A2P and the future market.