Why Operators Need to Focus on Maximising Application-to-Person SMS Revenue

At a time when the operators look for maximizing return on their network investment, Dialogue Group's CEO, Perry Offer, has advised Mobile Network Operators (MNOs) to focus on maximising their Application-to-Person (A2P) SMS revenue to compensate for Person-to-Person (P2P) revenue leakage, or face the risk of falling financially behind competitors.

The warning comes during the second day of Mobile World Congress in Barcelona, which brings together the world's leading operators.

With research showing a decline in P2P SMS revenues, largely due to the growth of Over-The-Top (OTT) applications, A2P SMS is emerging as a key service and revenue source for MNOs.

"In the last couple of years the mobile industry has sat back and watched as OTT applications have drained P2P SMS revenues. As OTT mobile messaging players rapidly diversify their products and services, they continue to put pressure on MNOs, making it hard for them to compete," explained Perry Offer, CEO, Dialogue Group. "A2P SMS will become a major and sustainable revenue generator over the coming years, so MNOs cannot afford to ignore it."

The A2P wheels are already fast in motion, with Ovum predicting that the amount of worldwide A2P messages will increase to 2.19 trillion by 2018. Meanwhile Juniper Research reported that the revenues will grow to a staggering $53.4 billion by the same year - far more than P2P SMS projections.

OTT services are using A2P messaging extensively for services like two-factor authentication for account verification or security. At the same time, enterprises are continuing to utilise A2P SMS for mission critical, time sensitive services. This has been particularly evident in banking, healthcare services, travel and logistics.

"The future is very bright for A2P SMS. If managed well, it can more than compensate for lost P2P revenues. It is absolutely imperative for MNOs to act now and ensure that they are fully monetising all of their A2P traffic - this is such a huge commercial opportunity," concluded Offer.