Q&A with IMC

IMC ventures into SMS

03 December 2019 | Natalie Bannerman

Cover

Capacity speaks to Internet Mobile Communications (IMC) CEO Mark Stewart about the company's new SMS PaaS.

As we know, IMC’s Bank of Telecom (BoT), is the international automated platform-as-a-service (PaaS) trading platform for voice services. BoT is now prominent in the voice market. Can you tell about its soft-launch for the SMS sector? What need is this latest iteration of BoT meeting?

IMC developed, operates and promotes the Bank of Telecom (BoT) automated global voice PaaS for international telecoms and it was first launched in late 2015. Today 1250+ carriers use BoT’s Voice PaaS for end-to-end automated trading and settlement as well as Value Added Service features such as traffic cleansing, transcoding, CLI & NLCI route testing and market reports.  

The international SMS market is worth $100 billion annually and currently operates in a manual sales mode based on bilateral trade contracts between MNO, MVNO’s and SMS aggregators and this grossly inefficient market originates from pre-competitive days of international telecoms.

However, the market is now considerably more complex; 1200 operational areas, over 10,000 SMS aggregators and over 120,000 different prices for SMS at any one time in multiple currencies for Premium, High quality, wholesale and SIM box quality international SMS routes.

Despite its complexity, international SMS delivery capacity is traded wholesale in billions of SMS across international telecom networks using outdated manual systems and AM sales methods supported by international trade shows.

This complexity has been a barrier to automation and consequently, the state-of-the-art for SMS trading is archaic, massively inefficient, with excessive costs of trade and open to errors and dispute.

As well as the BoT PaaS for end-to-end Global voice-call trading we also facilitate current bilateral SMS trading at 90 million SMS/month. We have the SMS market experience, customer base, with over 250 SMS aggregators on board already plus the PaaS development knowhow to deliver a game-changing solution for efficient SMS high volume trading.

The Bank of Telecom SMS PaaS (BoTSMS) will deliver an end-to-end, automated global SMS trading service between members to deliver market efficiency in terms a speed of sale and maximisation of revenue and margin, operational productivity, reducing errors and driving cost savings across a user’s business functions.

BoTSMS will disrupt SMS trading by providing high throughput SMS trading with sales automatically tested before routing. It will enable automated routing control and monitoring, a fully integrated rate system and same day settlements. BoTSMS members will gain global market access with pricing and quality statistics to make informed commercial decisions and the platform will use existing International Standards and observe regulation and advise a Members of their current trade position in real time 24/7.

In terms of wider drivers, there is currently there is unlevel playing field for regulated providers versus unregulated Over-The-Top providers, with a high operating cost burden to meet regulatory requirements, particularly as regards to data storage obligations. BoTSMS PaaS aims to drive costs efficiencies for regulated providers to enable reduced rate bundles to compete with OTTs (for whom regulation is becoming more likely) and BoTSMS will store all SMS traded for 6 years.

Can you tell us about its rich feature set and more importantly what challenges this will enable the SMS customer overcome?

At its core, the value proposition is the world’s first, global end-to-end SMS trading platform with the following features:

  • Direct submission of pricing and payment terms by members
  • Direct access to over 250+ (and rising) MNO and MVNO member networks for SMS market pricing
  • Smart contracts and quality statistics for timely commercials without email transfers.
  • Automated SMS quality testing and reports.
  • Access to HLR and Mobile numbering database information on a mammoth scale
  • Fully automated trading and payments system that improves efficiency and margins whilst reducing operational expenditures and Bank wire fees (~75% reduction on bank fees for each international payment).

The different challenges the platform overcome includes the variety of pricing types, the variety of service types, the multicurrency nature of the SMS industry as opposed to the US$ based voice industry, and the complexity of provisioning and testing in the SMS space. Unique solutions that we will offer the user will be:

  1. Pricing and matching solution to deal with multiple currencies and many thousands of pricing options.
  2. APIs into partner test systems to provide automated testing for SMS quality and data test variables
  3. API’s into HLR look up and mobile numbering databases for a global one stop check solution
  4. Automation of routing is far more complex and will require integration of multiple protocols, additionally complicated as SMS data is single or double byte depending on the language
  5. Multicurrency and multi-payment terms via API’s with FX organisations

Today’s SMS market is considerably more complex than voice - prices are determined by quality, international and national switching, sender ID classification (alpha or alpha-numeric), with over 1200 National Country Codes (areas of operation) and ~10,000 SMS aggregators the SMS wholesale market can have over 120,000 different prices at any point in time. International trades require international banking transfers, possibly 3 stages for complex routing, which delays settlement and increases trade costs. Despite the complexity, international SMS delivery capacity is traded wholesale in billions of SMS across international telecom networks using outdated manual systems.

The market complexity has therefore been a barrier to automation. Consequently state-of-the-art SMS trading is archaic, massively inefficient, with excessive costs of trade and open to errors and dispute. An SMS trade requires an overwhelming eight manually performed job functions using separate system elements including: 

  1. Contracts Manager: signed paper contracts printed, scanned and emailed between both parties.
  2. Engineering staff from each party set up a binding typically via SMPP protocol and respective IP addresses for SMS transfer
  3. Rates Manager: email to confirm sales and purchase rates relate to contract terms.
  4. Test Engineers: Quality testing of routes.
  5. Operations Engineers: An SMSC switch to manage the switching of SMS around the world and to monitor SEND performance.
  6. Billing Manager: An SMSC reports function for invoicing and accounting purposes
  7. Finance Manager: Banking transactions - payments for one wholesale trade may pass through several international banking systems with high fees and delays for settlement.

IMC has developed and operated the BoT PaaS for end-to-end for Global voice-call trading, effectively eliminating most of the above. 

We know that American Express and Western Union Business Solutions are integrated at an API level to Bank of Telecom PaaS. How do partnerships like these benefit the customer?

To offer an SMS carrier a unique blend of telco and fintech, with the features laid out above, is a compelling proposition and we have seen how well it works in the voice market.  Here are reasons why Bank of Telecom® is transforming the way the telecoms industry works and trade, benefits of course which any SMS trader can leverage:

TRANSACTION TIMES

Banks take too long to settle USD settlements. For example, international USD settlements via banks to Ukraine or Chile take 5 working days. Transfers within Europe frequently take 3 days. Transfers to Africa, Asia and South America also take 3 to 5 days whilst a settlement from the UK to the UK (in USD) takes two days. Further delays are incurred by numerous ‘Bank Holidays’ observed by bank’s who simply close transactions every year at Thanksgiving, Eid, Xmas, Easter, Divali, New Year, Chinese New Year, Ramadan etc. This either slows settlements or slows receipts but either way, slows settlement times. India, represents 10% of the global international transfer market, and has 18 Bank holidays, which translate into 18 business days, resulting in India being closed for nearly 1 month a year!

Differentiation Point 1:

With our APIs with AMEX and WUBS, settlement is done within 2 hours.

CASHFLOW

Improving cashflow by 5 days kills ‘Dead Money’ sitting in the international banking payment systems. Settlement payments done by telecoms company will be put to work immediately, as there are no delays in payment finality.  A telecoms company money is now in its own bank account or in its supplier’s bank account and no longer sat for 5 days in the ‘no man’s land’ of the international banking system.

In cashflow terms let’s look at what this means using a real example; a telecoms company that pays out twice a month on a 15 by 15 term contract to another telecom company would make 24 settlements a year to this single supplier. Let’s assume that the total annual supplier invoice is for USD 12 m, paid bi-monthly with 5 days delay on each occasion (remember all those Bank Holidays add up!). Therefore, the cashflow impact from using a Bank is USD 1 m x 5 days / 365 x 24 = USD 328,767 of cash tied up in trading using a bank each year.

Differentiation Point 2:

Using SMS same day settlements, the above example would free up USD 328,767 each year to be used for other purposes by the telecoms company. In addition, the faster paying telecoms would be regarded as a better payer by their supplier and could negotiate for better trades terms. As important, the company now does NOT need USD 327,767 to trade.

TRANSACTION FEES

When a bank makes a USD settlement on behalf of a client the settlement is routed via the USA, often around the world by different banks.  Rarely ever is there one bank involved from start to finish for a particular transaction. When the sending bank doesn’t have a relationship with the receiving bank then settlements are sent via an ‘intermediary’ bank to help get the funds to the right beneficiary. The intermediary bank deducts bank charges from the funds before they arrive at, for example, Lloyds bank for settlement. Each Bank has no control over or visibility of what these charges finally are. The net result is that when, for example, sending USD from the UK Lloyds Bank the charge to most countries is USD 40, but the total charge (including intermediary fees deducted) normally is USD 80 which can rise to USD 250 in certain instances (eg. Ukraine) but the final cost to the client is never known until after the transaction has been completed!

Differentiation Point 3.

Users are charged a single transaction fee of USD 20 for transfers, deposits or withdrawals resulting in a saving not less than 75% (assuming a USD 80 average transaction fee).

Differentiation Point 4.

Compared to regular banking, our customers face a transparent cost structure and know what they will be paying.

What part does automation play in the customer experience journey within the platform?

It plays an integral role as that essentially is the value proposition.  Members select the SMS sale price and payment terms per deal, post their SMS routes and when a match happens within the market, a deal is automatically made.  This then triggers the deal going through to testing and deals that pass go to on to ‘sending’. Once traffic is passing, a trading advice note is triggered and settled automatically by the Bank of Telecom, so the user will get paid before their invoice is generated, according to their payment terms.

For those who aren’t aware, can you tell us about the range of value added services available across your portfolio?

  • HLR look-up and Data Base checking
  • Automated Testing
  • Global Price Checker
  • Smart Contracts

Although immediately available for use, we know that full launch of the platform won’t be taking place for another 3 months. After this point, what’s the roadmap for the service? Any plans for the development of add-on features?

We will be integrating our BoTCoin Market payment service, which will enable traders with a BoTCoin Account to settle in seconds in a few seconds.