A2P SMS Messaging: Challenges and Opportunities

5 min read

While Application-to-Person (A2P) messaging includes a broad range of possible channels, it is important to note that the market is not static.

We previously looked at the A2P SMS messaging space & challenges as it currently exists, and even made a few predictions about how the current major technologies would fare in the near future. Now it is time to look more intently at that future and see what lies ahead for the world of A2P.

If companies in the mobile sphere want to keep ahead, they must look ahead. As inventor and futurist Richard Buckminster Fuller said: We want “to be architects of the future, not its victims.” Knowing how the market is likely to react can help companies plan and make the most out of emerging technologies.

RCS (Rich Communication Services) — the next SMS?

RCS or Rich Communication Services straddles the line between present and future. There have already been a number of successful campaigns in the US, UK, Europe and beyond. Retailers in particular love the rich aspects of client engagement RCS provide. And many operators across the globe have an RCS platform compatible with the GSMA’s Universal Profile standard.

However, “many” is not “all” and it remains to be seen how quickly other operators will get on board. The ideal scenario is that they recognise the potential of RCS — and the existing demand — and help drive the expansion of this channel.

RCS is certainly not new: The Rich Communication Services industry initiative was formed by a group of industry promoters in 2007 and was brought under the wing of the GSMA in 2008.

Movistar, Orange, and Vodafone Spain launched a beta version at the beginning of 2012. 60 mobile network operators (MNOs), manufacturers and Operating System (OS) providers now back the GSMA Universal Profile which was developed in November 2016 to remove fragmentation and ambiguity.

In October 2017 the GSM Association’s Future Networks programme launched an initiative called the GSMA A2P Future Messaging Lab.

Designed to bring leading stakeholders in the Messaging industry such as MNOs, aggregators, marketing companies and brands together, these labs respond to demands within the mobile ecosystem to explore the technological and commercial aspects necessary for driving RCS adoption. They aim to meet industry interest with real results and use cases.

Whilst use cases and the overall use of RCS in this industry sector will proliferate over the next 12 to 18 months, there are some obstacles to overcome — not least the lack of full operator support.

Furthermore, until Apple get on board with RCS, RCS will have zero chance of usurping SMS in its entirety. We have to understand that without Apple’s support, 20% of the addressable global market has been lost instantly.

The pricing models for it need to be better aligned and standardised too. Should they be based on time, session based or per message? Should the actual volume of data utilised be a factor? Nobody can really say for sure yet and this needs to be resolved rapidly.

RCS will undoubtedly eat into the traditional SMS market and we see this being a key factor in the impending reduction of the cumulative annual growth rate (CAGR) of A2P SMS in the near future.

Indeed, the mobile engagement channel held most dear second only to A2P SMS by enterprises in the ROCCO 2018 Messaging Strategy Report was RCS.

On the other hand, as a handset-native, operator-delivered channel, RCS also promises to win some of the A2P SMS market lost to apps. Its rich feature set allows it to offer functionality similar to that of OTT apps. Apps, however, are costly to develop and maintain — making RCS more appealing to enterprises.

Plus, since these apps operate over a user’s data connection, operators see little profit or return on investment from increasing A2P app use. This is one of the motivations for operators in more developed markets where app penetration is high and has taken some of the A2P market from SMS. But it should also be of interest to operators who have yet to face this A2P SMS messaging challenge, and who want to be proactive about securing their profit margins.

GMS is doing a lot of work in this area to push for a quick resolution to some of these questions. Our immediate plans involve building on our experience as a hub, to facilitate international connectivity with this new technology.

Chatbots and Artificial Intelligence (AI) — an engagement driven future?

Chatbots are another engagement channel that shows a lot of promise for the near future. These kinds of programme — think Alexa, Siri, or those customer service chat windows which appear on webpages offering assistance — have a promising mobile future, delivered by apps (or, indeed, the supposedly app-killing RCS).

Chatbots and Artificial Intelligence (AI) will certainly play an increasingly important role in A2P. They are widely used in customer support and sales functions. In fact, machine intelligence more generally has a role to play in the health of organisations, sifting through big data or (as we discuss elsewhere) enhancing network security.

AI really is making its presence felt but it must be recognised that chatbots are not true AI. AI refers to a type of intelligence that makes it possible for a machine to perform cognitive functions similar to those attributed to humans, compared with a traditional system, which reacts according to how it has been programmed to act.

In the 1950s and 1960s, computer scientists Alan Turing and Joseph Weizenbaum contemplated the concept of computers communicating like humans do with experiments like the Turing Test in 1950 and the invention of the first chatterbot programme, Eliza.

The term “ChatterBot” was originally coined by Michael Mauldin (inventor of the Lycos search engine and creator of the first Verbot, Julia) in 1994 to describe these conversational programmes.

Things moved forward but it wasn’t until 2016 that we saw the introduction of the first wave of artificial AI technology in the form of chatbots. Chatbots are often marketed as AI which can be very confusing, particularly for enterprises.

At the moment, the more complex a query becomes the less successful a chatbot has the tendency to be, the answer often not fitting with what the customer is actually trying to achieve!

Chatbots have definitely upped their game of late though and the rather clunky experiences most reading this will have been party to will be consigned to the annals of history in the near future. Because of this, the recent adoption curve for chatbots has been phenomenal.

Furthermore, practical AI, something that utilises the best mix possible of human intelligence and AI to provide answers that genuinely help customers, is something that is being worked on by many organisations and we will definitely be seeing a lot more of chatbots in the A2P space.

Meeting the future

We see plenty of opportunities on the horizon, both in terms of existing messaging formats and those just emerging. Meeting these opportunities will require careful consideration in itself.

The world of A2P consists of many different channels, and with new developments in terms of technology and technological readiness, making the best use of A2P can be something of a moving target.

Global Message Services firmly believes that aggregators have an important role to play in the evolution of A2P by fully understanding the market and sharing their unique perspectives.

GMS specialises in fostering close partnerships with MNOs and enterprises, providing them with clear, honest insights and a one-stop shop for messaging services.

This is the best way to bring real value to and cement the future of A2P messaging. Find out more about how GMS is helping mobile operators and businesses cope with A2P SMS messaging challenges and take advantage of the A2P market today!

Add Your Heading Text Here