Taking the power back in the A2P value chain
A2P messaging presents a growing opportunity for MNOs amid changing market dynamics. However, Steven Parrott, head of interconnect product and strategy at TOMIA, says that maximising its potential means seizing back control of the value chain.
Why is it important for MNOs to take more control of the A2P messaging market?
Historically, it made sense for MNOs to let other parties get involved in the enterprise relationship for messaging. These parties, such as aggregators, have done a great job communicating the value of how they can connect the enterprise to the telecom world.
But as the A2P market has grown, aggregators have sought to position themselves as primary holders of the relationship with such customers.
This means the MNOs don’t control the value of the message onto their network. Getting more involved is about ensuring they are receiving a fair share of the opportunity related to their investments in their own network and subscriber acquisition. It’s not just about lost revenue or lost margin, but also about maintaining their relationship with customers.
What has made this particularly important now?
The A2P market was already growing, but Covid came along and further shifted the dynamics. In this climate, there has been an increasing demand for enterprises to reach out and communicate with customers, while IoT and 5G are also driving new business-centric use cases.
Our philosophy is that you’re already selling to these people anyway through services such as VPNs, networks, devices and call centres, so it’s not a huge shift to increase the A2P relationship too.
What is the challenge for operators to take control of the A2P space and how can they do this?
There’s an industry perception that participating in the A2P ecosystem is super hard, risky and low margin. And it can be, especially if the only way to participate is as a hub or aggregator connecting enterprises to MNOs.
But it doesn’t have to be that way, and many of our MNO customers follow a different path.
Unlike aggregators, they benefit from having the end customers, meaning they can start thinking about alternative ways to execute their enterprise-enablement strategies.
MNOs that wish to get more involved actively want to manage their A2P business in a way which aligns with their objectives, meaning more and better business-to-business agreements.
What are some of the specific ways in which MNOs can get more involved?
The first thing that MNOs can do to better monetise A2P is take more control of the business relationships and messages terminating with their subscribers. That’s the most straightforward method, especially as this traffic is already going to your network and subscribers.
The second step is to take responsibility for exchange with key partners, such as other MNOs, for termination of off-net messaging traffic for enterprises – similar to the way MNOs already manage voice and data relationships.
The third and, frankly, most difficult method, is to start participating in the larger inter-carrier exchange of A2P traffic, almost like an aggregator. Though tough, the increased reach and revenue may make sense for an MNO.
How far you go is a discussion specific to an individual carrier, but from our perspective, the most important thing is to reclaim your face to the enterprise.
What does TOMIA offer to help MNOs here?
TOMIA sells software and solutions to help MNOs run their A2P business and configure their network for these services. It’s still complex to manage this, so you need software to make that a manageable process.
We also offer the ability to manage the business-to-business relationship between MNOs and customers, including elements such as the price, destination, rates and routes – helping reclaim ownership of the messaging ecosystem.
Are more operators trying to take control of this A2P space and how do you see this evolving?
Yes, we’ve seen some very good moves there – and I think that over the next three to five years, various operators will commit to a significant movement towards controlling this space directly.
As RCS [rich communication services] also evolve, MNOs have the chance to reposition themselves as the trusted and secure provider of business messaging in the future. We think this year represents an inflection point where devices, networks and use cases will finally align, presenting a new opportunity for MNOs to enable enterprise-to-subscriber messaging.
In tomorrow’s world, I think MNOs will say, “I want to build my relationships and monetise in certain ways, and I’m going to use my aggregator partners for things they do really well. But I’m not going to fully rely on them like I had in the past.”