Monetising A2P

 In News, Operator News

The Person to Person (P2P) SMS is declining, eroded by lower volumes and lower margins. Both under heavy pressure from the OTT solutions. Good news from the operator perspective, is that there is alternative revenue to be harvested from Application to Person (A2P) SMS.

So how to harvest these revenues?

Implement filter

Without a filter, SMS traffic will find alternative routes into your network. Routes where you don’t get paid. You can have your signalling provider implement a filter to cover the grey traffic over the mutual forgiveness roaming signalling routes, but please mind that this is only a portion of the traffic. This will not cover the domestic bypass, which can be both via domestic interconnect, via your own Large Accounts and SIM boxes. A full strategy for filtering must be implemented using a local filter. Covering the major leakage will help you (short term), but in the end you will risk having the same amount of leakage from the unpatched holes. Also, blocking Global Titles manually, is a quite inefficient method. Labour intense and also technically inferior to a real filter. A filter pays off.

Set a reasonable rate

The findings at Beepsend is that there is a clear price elasticity at play. If the rate defined is beyond the willingness to pay for marketing messages (in which we include all messages where the same content is sent to multiple recipients), then the volumes go down drastically. Even with the increased revenue from the messages you still have, this will not offset the revenue lost from the messages you scare off. You need to have a price that deters the SPAM but you don’t want to deter the commercially relevant parts of the marketing traffic.

The price each market can bear is different, but the working assumption at Beepsend is that the commercial optimum is in the range between 1 and 2 US cent for most market. More 2 cent for the developed world, and more 1 cent for the developing world. SPAM is deterred as soon as you start charging anything at all.

Contractually, the GSM Association SMS Interworking agreement template (AA.60) contains the relevant parts for signing both P2P and A2P interworking. It also supports you reselling termination in your own network, to national competitors and to your international partners.

Contact us at Beepsend to get started.