BaaS: Giving operators the A2P advantage

09 October 2015 | Silvio Kutic

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Silvio Kutic

Blog Author | Infobip; CEO


It is fair to say that in 2015 mobile operators are under pressure. A trend of declining revenues when network investment costs to satisfy consumer demand are skyrocketing puts strain on operators to maximise their profits. It’s a competitive environment and the advent of disruptive OTT players poses a significant challenge to traditional mobile services.

It is fair to say that in 2015 mobile operators are under pressure. 

A trend of declining revenues when network investment costs to satisfy consumer demand are skyrocketing puts strain on operators to maximise their profits. It’s a competitive environment and the advent of disruptive OTT players poses a significant challenge to traditional mobile services.

Each operator is dealing with this pressure in different ways, yet few are taking full advantage of the lucrative opportunity presented by A2P SMS messaging. Amidst the growth of mobile and web services this technology has the potential to boost the bottom line and by adopting it through the Business-as-a-Service model this can be done at virtually no cost to the operator. 

Application-to-Person SMS is a tried and tested communication channel that is thriving thanks to enterprise adoption seeing an ever expanding list of SMS use cases, from SMS-based two-factor authentication to real-time notifications or alerts. 

The uptake for this re-imagined technology is astonishing with Transparency Research predicting the A2P SMS market will reach $70 billion by 2020. With such high revenue potential SMS is a technology that can generate significant margins at a time when operators need it most. 

The opportunity is undoubtedly there, however there are few operators that have the in-house resources to develop professional SMS services let alone market them to a diverse audience ranging from large enterprises, to start-ups and OTT players. 

Entering the professional A2P SMS space requires developing a platform that meets the needs of professional SMS customers in terms of security and reliability, ensuring connectivity and creating a product that is simple to use. Add to this the need for dedicated sales and specialist support services, and you’ve got an entire new business to build. 

While mobile operators might possess the manpower to do this, their business focus lies elsewhere and a lack of time and relevant expertise means this simply isn’t an option.

This is where the expertise of specialised SMS providers comes into play. Unlike operators, who in juggling a vast number of services often neglect what A2P SMS has to offer, their sole focus is the delivery of SMS and driving progress not only from a technology perspective, but from a business one. 

Business-as-a-Service goes beyond simply giving an operator the tools to roll out professional messaging with the specialist messaging provider also dealing with the sales and support aspect of the business. 

The SMS provider handles all aspects of the service, from technology and connectivity to client acquisition and support, literally delivering operators a new business arm without the usual risk, investment and delay to market. This not only gives operators A2P SMS capabilities with virtually no expenditure, but its customers benefit from the experience and expertise professional messaging providers have to offer. 

Innovation in SMS is of course essential to its continued growth, but so is innovation in the way it is delivered. 

The Business-as-a-Service model gives operators a way to enter the lucrative A2P SMS business and expand their portfolio of services not only attracting new customers but improving the experience of existing ones. BaaS is a bridge between mobile operators and the A2P SMS revenue opportunity and rolling out this innovative business model gives operators a welcome respite in a  competitive and fast-moving industry.