Messaging industry needs an “omnichannel approach” to capture A2P revenue opportunity

27 November 2018 | James Pearce


Though rich communications services (RCS) will offer a huge opportunity to the global messaging industry, the sector needs to take an omnichannel approach to best capture potential application-to-person revenue opportunities.

This was the view shared by the keynote panel at this year’s Messaging and SMS World event, which was held in London on 27-28 November.

The panel, which had speakers from CLX Communications, Vodafone Carrier Services, Nexxmo, Viber and WeFarm. It looked at “Moving Messaging Forward” and was chaired by Nick Lane, a mobile insight analyst at Mobile Squared.

RCS is set to be worth $18 billion in revenue by 2023 – up from just $184 million in 2019, according to figures share by Lane prior to the panel. Currently, around 1.67 trillion application to person (A2P) messages were sent in 2017, but this is estimated to rise to 2.8 trillion by 2022.

Vodafone is one carrier that has deployed initial RCS trials, running the tests in 15 countries including a live deployment in three. Overall, it channels around 7.1 billion A2P messages a year.

Nick Scallan, VP carrier messaging services at Vodafone Carrier Services, said: “Vodafone’s messaging service is predicated around the A2P messaging services – 7.1 billion messages last year. We come at it from a ubiquitous approach across devices, which RCS doesn’t have currently. We have it across 15 countries and are currently live in three. We see very high clickthrough rates compared to other messaging services – around three times the amount. Vodafone Spain did it a campaign through it which was very successful.”

However, according to Scanlan, an omnichannel approach – using not just SMS and RCS, but also OTT providers such as WhatsApp and Viber, would benefit the messaging sector.

“I wouldn’t single out any one OTT,” he added, “but the pie keeps on getting bigger. We would be interested in exploring interoperability between OTTs and SMS.”

Robert Gerstmann, chief evangelist and co-founder at CLX Communications, was asked about pricing for RCS. He said: “You can draw up ideal scenarios and those that are doable. Pricing for RCS should not be too dissimilar from SMS at least initially. For operators, it gives a chance for them to see the take and how their revenue transfers from SMS to RCS.

“Simplicity is super important – you need a transactional rate for outbound messaging, with a pricing model that recognises the different content and prices it fairly. It comes down to payload, ultimately. It would be nice if payload was included in the actual cost that the merchant pays, but there needs to be an upper limit to how much they pay.”

Also speaking on pricing, James Lasbrey of Nexmo, said: “Viber works, but WhatsApp isn’t a direct replacement for SMS – they’ve priced it higher than SMS, so it isn’t really a threat. In terms of pricing, MMS is still being sold in the US and we’re seeing that grow. In France, customers don’t want WhatsApp. So RCS can learn a lot when it comes to pricing from the OTTs.”