The Wholesale Agreement and Solutions Group (WAS) met this month in Šibenik, Croatia for the 18th time. Hosted by Infobip and GSMA, the event was an opportunity for Wholesale and Roaming professionals to meet, discuss issues and make deals that support the future growth of the industry.
Openmind Networks remains as dedicated as ever to remaining at the forefront of the messaging industry, and we were delighted to have a team of experts on the ground throughout the week at WAS #18, meeting customers, partners and industry leaders. Here are some of the key takeaways from the event.
What We Learned from WAS #18
Messaging Evolution to Omnichannel
SMS is in a precarious position with OTT operators and RCS moving to supplant it across a number of fronts including A2P. The network operators of this world understand the pressing need to find omnichannel solutions for enterprises and brands so the messaging industry can continue and grow in the coming years.
What Will Omnichannel Messaging Look Like?
For some it means a mix of messaging, email, voice and OTT. For others it is more concentrated on the messaging suite and includes SMS, RCS, RBM, WhatsApp, Viber, Telegram and other OTT players. The omnichannel solution needs to provide a simple way for brands to communicate with their customers on the channel that they prefer.
From the perspective of the enterprise or brand using an omnichannel messaging solution needs to be able to take in messages and route them to a variety of messaging channels. The problem, as it stands, from the brands perspective is that there is no one universal messaging channel that also contains advanced engagement features that a brand would need for communicating with customers.
A key component of the omnichannel offering is audience management. In effect this means that individual subscribers would indicate a preference for which messaging channel they wish to be communicated with on. This might be WhatsApp, Viber, RCS or even SMS. A database of audience preferences needs to be maintained so subscribers always receive messages the way they have indicated. Routing messages in an omnichannel system requires this database to be correctly maintained and capable of being updated at the request of a subscriber at any time.
Another key component of omnichannel messaging is the ability to move beyond simple text messages and into more complex functionality that conversational messaging demands. Read receipts of course are an obvious example of the type of experience subscribers are used to from OTT channels and would expect in an omnichannel system. However, it is from the perspective of the enterprise user who is creating and crafting communications that we should look at this. For this enterprise user it is important to be able to create dynamic campaign flows and sequences of messages. Creating a communication campaign may involve multiple messages to be scheduled in sequence. It may even require branched responses or chatbot functionality to respond to common inquiries. Campaign flows or sequences should be at the heart of the enterprise user experience as this is now the expectation from this segment from their usage of communication tools like online chatbots and CRM systems.
AIT and The Need for Price Certainty
A panel discussion with senior industry players from BICS, GMS, Sinch, Infobip and Monty Mobile addressed the issue of whether there was an existential threat to SMS. The context for this was presented by Mobilesquared who summarized the impact of Artificially Inflated Traffic on the SMS messaging industry.
Artificially Inflated Traffic fraud will cost enterprises an estimated $2.4 billion between 2022 and 2024.
Nick Lane, CEO, Mobilesquared
Nick Lane, CEO said AIT fraud will cost brands an estimated $2.4 billion between 2022 and 2024, adding that the actions in the past two years will cost the A2P SMS industry $14.4 billion in revenue by 2027.
AIT traffic is eroding trust between telecom operators and enterprise to the point where, it was suggested, American Express have now pulled back from using SMS for any customer communications other than two-factor authentication.
AIT fraud occurs when cybercriminals generate large volumes of fake SMS messages through apps or websites.
90% of operators raised their A2P termination prices in the past two years. Of that 90% just 7.7% increased their international termination rates by less than 5%. This 5% figure was considered the upper limit of what was acceptable as a price increase in A2P SMS rates prior to mid-2021.
Amazingly over a third of mobile operators have increased their international termination rates by more than 100% since 2021. This price gouging of the A2P SMS channel to make up for stagnant or falling ARPU in the wider subscriber base has not gone unnoticed by brands and enterprises though as is evidenced by the AMEX pivot to in-app messaging.
In fact, it was suggested that some vendors are pulling out entirely of working in certain countries where price inflation is damaging the perception of SMS very significantly. It remains to be seen if this situation in the Caucuses will be replicated in other countries.
Brian D’Arcy of Infobip was keen to stress that the SMS product is a very high value product to the enterprise market that does an incredible job of communicating ubiquitously. However, he acknowledged that the industry as a whole was failing to control pricing for A2P SMS for enterprise and without this control the SMS product would be ripe for disruption or leakage of this business messaging traffic to other methods of messaging or communicating.
A panel of senior industry players including Brian D’Arcy, Charles Upchurch, Sarah Barakat, Matteo Gatta and Pedro C. E Silva were asked to rate our industry’s response to the issue and they averaged less than 4 out of 10. Now is the time to take this issue seriously or face a collapse in enterprise spending on SMS in the coming months.
How does AIT work in practice?
Scammers create a bot that generates fake phone numbers and the bot then uses these numbers to request OTPs or other SMS messages. The cybercriminal then resells the OTP or SMS to commit other fraud, such as account hacking or data theft.
Fraudsters can also use fake traffic to inflate the cost of legitimate SMS messages by sending fake information to premium numbers that charge money for each message sent.
This traffic is used to inflate the cost of legitimate messages in SMS messaging, which leads to significant financial losses for businesses. The real threat of the impact of inflated traffic is on inflating prices. The market adjusts if prices go too high by using a substitute.
Looking to the Future
WAS#18 was a brilliantly run event and a great opportunity to gauge the mood of the industry. Old friendships were reignited and new connections were made but the learnings from this event will drive innovation cycles and priorities for the coming year.
If you have additional suggestions or insights we would be delighted to hear from you. If you would like to discuss omnichannel or fraud prevention solutions with our team we would be happy to talk. See you at the next WAS event in Istanbul in 2024!
To learn more about the topics covered in this article, or to discuss how Openmind Networks can help you navigate the future of business messaging, please get in touch at sales@openmindnetworks.com or contact our team of experts online here.
