ANALYSIS: The MNO struggle with A2P

14 November 2014 | Kavit Majithia


Mobile operators are struggling to enter into the elusive application-to-person (A2P) SMS market, following the collapse in revenues generated from person-to-person (P2P) services, according to a recent industry report.



In a special feature last month, Capacity explored the SMS opportunities for mobile operators, and highlighted huge potential for A2P SMS.

However, experts at analyst firm mobilesquared and mobile interaction company Tyntec – who completed a survey of more than 50 mobile network operators (MNOs) – concluded that this is proving easier said than done.

It is no surprise that P2P revenue is decreasing, as consumers turn to free internet-based messaging services such as WhatsApp, Skype and Facebook Messenger.

The report said that 81% of MNOs surveyed have cited a decrease in traditional telecoms offerings such as P2P SMS as their “most pressing concern”. A further 32% of respondents had seen a reduction in P2P traffic over the last year, while 50% have seen an increase in A2P SMS.

However, A2P SMS has long been associated with spam, and so operators seem to be unsure how to work this to their advantage.

Thorsten Trapp, co-founder and CTO at Tyntec, said that it is OTT players and enterprises that are driving the use of A2P SMS by providing personalised, real-time customer services such as account updates, reminders and SMS-based authentication services.

Trapp believes that building relationships with companies like these can help MNOs to develop effective, forward-looking business strategies for implementing A2P.

“Our relationships with operators, OTTs and enterprises alike put us in the perfect position to be able to support MNOs with attractive global A2P offers to close coverage gaps and provide competitive pricing,” Trapp said. “Only by being open to partnerships will MNOs have the best chance of success of leveraging opportunities such as A2P SMS.”

Neelie Kroes, the departing VP of the European Commission, made a speech in October 2014 which also urged telcos to work more closely with the OTT sector.

It seems A2P SMS is just one example where such a partnership could prove to be a win-win situation for all of the parties concerned.