ebulletin #1 - mahindra comviva mahindra comviva’s head of messaging & broadband aditya dhruva...

eBULLETIN #1 News and insights on mobile messaging

SUPPORTED BY

FEATURINGWHAT’S NEXT FORMOBILE MESSAGING?FROM MAHINDRA COMVIVA’SHEAD OF MESSAGING& BROADBANDADITYA DHRUVA

MOBILE MESSAGINGFRAUD REPORT CLX COMMUNICATION’SROBERT GERSTMANNREVIEWS THE FINDINGS

A2P MARKET FORECASTSMOBILESQUARED’SNICK LANE ADDS INSIGHT

PLUS: MESSAGING NEWSROUND-UP, CONVERSATIONALCOMMERCE AND INDUSTRYSTATS & FACTS

MEF MESSAGING EDITION eBULLETIN #1 2

FOREWORD

WHAT’S NEXT FOR MOBILE MESSAGING?INSIGHT FROM ADITYA DHRUVAHEAD OF MESSAGING & BROADBAND AT MAHINDRA COMVIVA

MOBILE MESSAGING FRAUD REPORTANALYSIS FROM ROBERT GERSTMANNMD FOR CLX ENTERPRISE DIVISION

NEWS ROUND UPNEWS & ANALYSIS FROM ACROSS THE MOBILE MESSAGING ECOSYSTEM

MARKET FORECASTS A2P 2015-2020NICK LANE, CHIEF INSIGHT ANALYST FROM MOBILESQUARED

CONVERSATIONAL COMMERCEMEF’S COO JOANNE LACEY DISCUSSES THE POTENTIAL OF CONVERSATIONAL COMMERCE

INDUSTRY STATS & FACTS

3

4

6

8

11

12

13

3MEF MESSAGING EDITION eBULLETIN #1

elcome to the Mobile Messaging edition of MEF’s eBulletin series which takes a look at the issues, business models and market drivers

that shape the enterprise messaging space.

It features news, views and stats from across this exciting and dynamic channel.From enabling developers to create tools for engagement to driving authentication, m-commerce and marketing, A2P messaging continues to see fantastic growth as itcaptures more verticals and expands use cases to evolve as a robust and secure market.

Analysts forecast strong revenues for A2P messaging, with Mobilesquared predicting growth of more than $4 billion this year alone. In this issue, the analyst firm’s Chief Insight Analyst, Nick Lane, shares market forecasts for 2015 – 2020 and discuses how mobile operators are key to unlocking the multi-billion dollar SMS ecosystem whilst MEF’s COO, Joanne Lacey, looks at another, much-hyped, driver of engagement via messaging – conversational commerce.

The channel is of course not without its challenges which is why MEF launched the Future of Messaging Programme in 2015 to bring together stakeholders from across the value chain to combat fraud and provide a forum for market development.

Some of the issues being tackled by the group are featured in this edition of the eBulletin including contributions from Aditya Dhruva, Head of Messaging and Broadband at Mahindra Comviva discussing the challenge of revenue leakage and Robert Gerstmann’s, MD for CLX Enterprise Division, analysis of the recently published MEF Messaging Fraud Report 2016. The report looks at trust in the channel and shines the spotlight on the problem of spam and SMiShishing based on data from 6,000 consumers across nine countries.

Later this year, MEF’s Working Group will publish its first set of guidelines to tackle some of the fraud types identified in the Fraud Framework launched earlier this year. It’s essential that we work together as an industry to ensure that the channel remains trusted and continues to enjoy sustained growth. We hope you enjoy this Mobile Messaging eBulletin and consider getting engaged in this pivotal industry initiative.

RIMMA PERELMUTERCEO, MEF

FOREWORD

W

You can find out more information on the programme at:www.futureofmessaging.com

http://www.futureofmessaging.com


hilst revenue leakage continues to hobble the A2P messaging industry, there are many more

opportunities to bring messaging to new sectors. Here Aditya Dhruva, Head of Messaging and

Broadband at Mahindra Comviva discusses why taking a multi-layered, multi-channel approach to enterprise messaging will put the consumer first and boost the A2P market.

The telecom sector’s increasing focus on digitization has created a plethora of challenges and opportunities for enterprises.

One recent McKinsey report showed that 70% of customers rate their purchase experience based on the how a brand engages with them. Elsewhere, Forrester Research has stated that a 10% improvement in a company’s customer experience score can translate into a $1 billion plus impact on revenue.

It follows that businesses now need to aim at ensuring constant customer engagement.

In this context it’s unsurprising that the mobile device has emerged as the primary tool in the engagement process. And today, with a 90% open-rate, it is enterprise or A2P SMS that both endures as the most reliable channel to achieve consumer engagement and going forward shows the most opportunity for growth.

To give that some context, A2P messaging is already widely used across a range of industry sectors:

• Retail (order confirmation, delivery dispatches, delivery updates)

• Finance (alerts, transaction verifications)• Transport (freight/asset monitoring,

delivery tracking, connected car, navigation, ticketing)• Healthcare (clinic search, test results, information

dissemination)• Logistics (tracking shipments, delivery times, pick-ups and

delays)

And as the A2P market gains traction, new use cases and sectors are coming to the fore. These include interactive surveys, social media-based communication, multi-channel marketing campaigns and more. At the other end of the spectrum, financial uses such as one-time passwords (OTP) and natural disaster alerts are registering significant uptake.

At the same, consumers have diverse preferences when it comes to digital engagement. Where once enterprises largely deployed SMS or email to engage their customers, now there are many more options with MMS, push messaging and newer channels like chat apps and other IP based forms of communication which are gaining traction in markets with high a penetration of smartphones and high-bandwidth network capabilities.

WEnterprises that are dependent on standalone platforms for SMS, USSD, or over-the-top services find it difficult to move from one channel to another.

Yet the diversity of messaging platforms is in fact an advantage for enterprises because new multi-channel solutions, such as Mahindra Comviva’s Ngage, have simplified the creation and delivery of the messaging process by providing tools that allow personalised targeting, control and filtering of unwanted messages and strict adherence to existing contact policies across a range of messaging options.

And crucially, by providing a range of messaging channels, usually SMS, USSD and MMS, enterprises and operators are able to offer their customers choice over their preferred channel of communication, ie, taking a customer centric view. Typically that breaks down as: SMS (75-85%), USSD (10-15%), MMS (5-10%).

The multi-channel approach results in a more engaged consumer with a 15-20% increase in campaign effectiveness.

Fraud, trust and revenue leakageMobile intelligence firm, Mobilesquared, recent report on the enterprise messaging market

indicates that the market value of A2P messaging was $12.88 billion in 2015 and forecasts it to grow to $58.75 billion by 2020.

Yet before revenue from A2P messaging is leveraged to the fullest, challenges such as grey routes (where an operator’s P2P messaging network is used for A2P messaging services) need to be tackled.

Since P2P SMS is economical, it can be purchased and used for grey route A2P services. In absence of any binding agreement, revenues are accrued only by operators whose network is used for message termination. The operator on whose network the message was fraudulently initiated loses revenue.

“WHERE ONCE ENTERPRISES

LARGELY DEPLOYED SMS OR EMAIL TO ENGAGE

THEIR CUSTOMERS, NOW THERE ARE

MANY MORE OPTIONS AND

CONSUMER PREFERENCES

WITH MMS, PUSH MESSAGING AND

NEWER CHANNELS LIKE CHAT APPS.”

ADITYA DHRUVAHEAD OF MESSAGING & BROADBAND AT

WHAT’SNEXT FOR MOBILE

MESSAGING?


Grey routes are a growing concern for operators, and they have to continuously evolve their learning methods to safeguard their network against grey routes and other fraud mechanisms.

Whilst strict regulation and compliance will help reduce the intensity of the problem, grey routes are loopholes that will continue to exist. Operators must invest in end-end security solutions that will identify and analyse grey routes, and ring fence the network to curb them by supporting subscriber centric communication policies.

Mobilesquared estimates that as much as 65% of the A2P market is operated as grey route traffic and that figure will drop to 19% with the roll-out of next-generation SMS revenue assurance platforms. In other words, the drop in grey route traffic alone will help drive operator revenue in the messaging ecosystem.

In addition to revenue leakage, the volume of spam messages continues to increase. And whilst spam utilizes tremendous network capacity, as well as cost in the form of termination fees, it is also an annoyance to consumers whom are in danger of becoming increasingly alienated from the messaging process.

Best practice and the futureThe security provided by mobile networks, the rising penetration of mobile phones combined with the high open rates of SMS messages continues to fuel the uptake of A2P messaging. However, without a clear picture of grey route traffic, it is likely that mobile operators will lose out to SMS aggregators.

As a measure to build out enterprise messaging its therefore imperative to employ strong anti-spam platforms, that both enable the deployment of multi-channel messaging and adhere to regulation.

Furthermore, whilst today chat apps and OTT messaging are largely a P2P endeavour, in the coming months and years many of these players will seek ways of opening their API’s for the enterprise messaging market. This will allow enterprises to focus on applications, push notifications and other IP based communication.

However, enterprises will still continue to use SMS as a channel for critical and high priority notification and authentication because it is reliable, ubiquitous and unlike OTT messaging doesn’t require the user to own a smartphone or a 4G or WiFi network for its operation.

“…ENTERPRISES WILLSTILL CONTINUE TO USE SMS AS A CHANNEL FOR CRITICAL

AND HIGH PRIORITY NOTIFICATION AND

AUTHENTICATION BECAUSEIT IS RELIABLE, UBIQUITOUS

AND UNLIKE OTT MESSAGING DOESN’T REQUIRE THE USER

TO OWN A SMARTPHONE OR A 4G OR WIFI NETWORKFOR ITS OPERATION.”


onsumers are embracing messaging in all its forms and in the enterprise space its areas such as two-factor authentication, notification and marketing that are driving the market. It’s also an unfortunate fact that with any significant form of digital interaction,

fraudsters seek to exploit consumers with sharp practices.

A recent report from MEF and CLX Communications – Mobile Messaging Fraud Report 2016 - found 26 per cent of chat app users get an unsolicited message every day, while 49 per cent receive at least one a week. With SMS it’s a similar story. More than a quarter of consumers (28 per cent) receive an unsolicited SMS message every day with 58 per cent report receiving one every week.

The majority of unsolicited mobile messages are of course just a nuisance – notifying consumers of an un-wanted offer or service. However 33 per cent said that they had received a SMiShing message aiming to trick them into disclosing personal data such as bank details or passwords for online services.

Here, Robert Gerstmann, MD for CLX Enterprise Division takes a look at the report findings. MEF’s Messaging Fraud Report provides a remarkable update on how the messaging ecosystem is evolving and how some newer mobile messaging channels are increasingly being polluted by unsolicited and fraudulent messages.

It’s interesting to note that although the SMS channel receives the highest daily occurrence of unsolicited messages it remains the most trusted. This is likely because the percentage of spam messages is still a tiny fraction at less than one per cent overall. When compared to the nearly 50 per cent on email, SMS is still a clean and powerful channel. It’s also extremely surprising that over-the-top messaging apps only lag behind SMS by two per cent in daily occurrence, yet SMS is by far more ubiquitous and open.

ROBERT GERSTMANNMD FOR CLX ENTERPRISE DIVISION

PUTTING SPAM UNDER THE MICROSCOPE

MOBILE MESSAGINGFRAUD REPORT 2016:

NO 45% DON’T KNOW

21% YES 33%

HAVE YOU EVER RECEIVED A TEXT MESSAGE (SMS) FROM SOMEONE PRETENDING TO BE SOMEONE THEY ARE NOT, E.G., YOUR BANK OR A COMPANY THAT YOU HAVE AN ONLINE ACCOUNT WITH, ASKING FOR PERSONAL ACCOUNT INFORMATION OR FOR MONEY?

C


In our experience there has always been a high correlation between the cost to deliver a message and the amount of spam and fraud the channel attracts. It could be argued that the reason for low levels of spam in Germany and France is directly related to:

a.) The cost to send a message through legitimate routes is relatively high in those countries b.) The effectiveness of local operators in those countries to block fraudulent routes into their networks and filter spam is very good.

By contrast India, Nigeria and South Africa have a cost for sending a message that is relatively low, and although things are improving rapidly these networks have historically been less protected. As a consequence the incidents of spam are high.

It is also true that in many mobile first countries consumers are less likely to have email addresses and SMS therefore acts as a substitute for email marketing.

Cost, (or lack of it) may be the reason why 72 per cent of users have received unsolicited messages on over-the-top (OTT) messaging apps such as Whatsapp, yet no official APIs exist for sending Enterprise to Consumer messages on many of these platforms yet.

This is a cause for concern as it indicates that fraudsters are using weaknesses in the person to person capabilities of these apps to send messages on behalf of enterprises. These apps will need to tread carefully when they do decide to open their apps up to legitimate enterprise communications. They would not want to replicate the fate of push notifications, where overzealous marketers have caused this channel to be trusted by jus 16 per cent of the 6,000 respondents.

It could be argued that the reason why most people in the UK report unsolicited messages on SMS is because the operators have done a good job in collaborating on creating a cross operator shortcode (7726) that can be used to report such messages. In addition, there is a perception that regulators in the UK and the USA will prosecute offenders which is not always the case in other mobile first countries.

In our view there are a number of things that can be done in order to reduce fraud and spam across all channels;

1. Create a global shortcode, long number or email that can be used to report unsolicited messages. The easier we make it, the more people will do it. And ensure that the resulting reports are shared across the ecosystem in an automated way so that they can be acted on by key players.

2. Operators must continue to install SMS and SS7 firewalls into their networks to prevent grey and fraudulent routes from being exploited and used for sending spam and phishing messages.

3. OTT messaging apps must close holes in their systems that allow individual user accounts to send large amounts of unsolicited marketing messages undetected.

4. When OTT messaging apps finally allow for sanctioned Enterprise to Consumer messages to be sent legitimately via an API, they must seriously consider charging something meaningful to deliver the message so as to ensure that both fraudsters and overzealous marketers do not abuse the channel.

5. Cloud communication providers like CLX must innovate and implement better ways to validate the identity of companies to ensure that phishing attempts are thwarted early and often.

All of the above recommendations will be presented and discussed at the MEF Future of Messaging Programme with the intention of getting adoption across the ecosystem and driving real change to protect and improve the consumer experience of mobile messaging and the Mobile Messaging Fraud Report 2016 can bedownloaded here for free.

16% 17%

21%

11%

14%

31%

16% 17%

7% 6%

20% 19%

25%

18%

13%

33%

27%

13% 15% 15%

6% 9%

6% 4%

7% 8%

6% 5% 6% 3%

10% 11% 11% 10% 11%

8% 8%

12% 12% 10%

20% 24%

19% 22%

20%

10%

23%

18%

28%

19%

28%

20% 17%

34% 35%

10%

20%

36% 33%

47%

GLOBAL

HOW OFTEN DO YOU RECEIVE UNSOLICITED TEXT MESSAGES (SMS) MESSAGES?

NEVER OCCASIONALLY ONCE A MONTH ONCE A WEEK 1 – 3 TIMES A WEEK EVERY DAY



GREY ROUTES COULD LEAK $62 BILLION OUT OF THE INDUSTRY OVER SIX YEARS

Operators could lose out on $62 billion if they fail to tackle grey route messaging traffic, says a new study.

Juniper Research found that, despite building firewalls and other security measures, operators are still leaking revenue to companies that bypass legitimate SMS channels. Indeed, grey route traffic now accounts for more than 30 per cent of all A2P messages.

Juniper says that the creation of high-volume, low cost SMS bundles by operators is contributing to the problem. It also highlights the possibility that OTT companies might enter the A2P market by the end of the decade.

REPORT: A2P SMS BYPASS AT “ALARMING LEVELS”

Research from Dialogue Group says 77 per cent of mobile networks are not fully protecting themselves from A2P SMS bypass.

The company looked at 199 networks in 84 countries, and found that for 14 per cent of them all traffic was terminated via bypass channels. 37 per cent were found to have significant bypass activity. Only 23 per cent were unaffected.

Dialogue said grey route activity was the most widespread problem, impacting 51 per cent of networks. Termination via domestic interconnect links was next, at 38 per cent. SIM farms and SIM box bypass were detected in 14 per cent of networks.

GLOBAL MOBILE AND CLX COMMUNICATIONS TEAM UP ON TEXT VOTING

US voters can use SMS alerts to get information on their registration status, voting information and polling locations - thanks to a market trial.

Georgia and Colorado have been working on the scheme, which is powered by with Global Mobile and messaging provider CLX. Administrators believe it may encourage

Millennials, who are less inclined to vote but more inclined to use digital devices for accessing information.

Petter Bengtsson VP of US Sales at CLX Communications, said: ‘We are really pleased to be working with Global Mobile on this new initiative. Short-codes provide consumers with a memorable and easy way to communicate with businesses that can drive real results’.

GOOGLE LAUNCHES ITS ALLO STANDALONE MESSAGING APP

Android users have a new richer messaging option to rival Apple’s iMessage: Allo.

Google first announced Allo in May, and has now rolled it out officially. The app incorporates AI and search tech, so it can suggest automatic replies to conversations, or offer up

search-related suggestions. For example, if you’re talking about movies, it may surface local showing times.

Obviously, Google needs to do something in messaging given the progress made by iMessage, Facebook and WhatsApp etc. The firm believes Allo is more sophisticated than them all. However, its capabilities have promoted more questions around privacy.

NINE OUT OF TEN CONSUMERS WANT BRANDS TO MESSAGE THEM

People really want to talk to companies via messaging apps - but most enterprises are not set up to respond, says a study by Twilio.

It surveyed more than 6,000 consumers across North America, Europe and Asia and concluded that 85 per cent actively desire two-way conversations with brands.

Regrettably, it also found that less than half of global businesses have the infrastructure in place to fulfil this customer demand.

"Today's report highlights a growing divide between consumers and brands," said Manav Khurana, vice president of product marketing at Twilio. "Consumers message more than they call, email or even post on.

TELEFÓNICA GROWS ITS A2P BUSINESS BY 22 PER CENT IN A YEAR

Enterprise messaging is on the up at Telefonica, which reported a 22 per cent jump in 2015.

The firm predicts SMS as a channel for business comms will grow for the next ten years. It says the ubiquity of SMS and the fact that 90 per cent of texts are read in minutes makes it perfect for enterprise messaging.

James Lasbrey, global head of messaging at Telefónica, said: “While the (messaging) market has developed with the success of free apps such as WhatsApp, Snapchat and Facebook Messenger, the potential of SMS for business is unrivalled.”

NEWS ROUND-UPNEWS AND ANALYSIS FROM ACROSS THE MOBILE MESSAGING ECOSYSTEM


INFOBIP OPENS OFFICE IN BEIJING

Croatia’s messaging specialist Infobip has invested 5 million euros in its Chinese expansion, and now it has a dedicated office in the capital.

The company opened a Shenzhen office in December 2015, and already serves a number of Chinese internet and tech firms with services such as two-factor authentication, mobile number validation, notifications and omni-channel campaigns.

“We’re honoured to be part of the country’s amazing tech ecosystem, which is rapidly shaping itself into one of the world’s principal IT centres,” said Silvio Kutic, Infobip’s founder and CEO.

AMAZON ENTERS THE CHAT BOT FRAY: HIRES “HEAD OF NEW BOT PRODUCTS”

US tech giants are determined to make conversational commerce a ‘thing’, and now Amazon has joined the race.

It has appointed Navid Hadzaad’s as its “head of new bot products”. Hadzaad was the founder of Angel.ai, a bot company that originally launched as virtual assistant

GoButler, but then pivoted into a natural language processing technology.

This led some reports to suggest Amazon had bought Angel.ai, which it denied. But the hire reflects Amazon’s interest in conversational commerce. Unsurprising given the e-commerce status of Amazon and the success of its intelligent assistant Echo

MILLENNIALS PREFER TO HEAR FROM BUSINESSES VIA TEXT

Young adults would rather get a text from a company than an email or phonecall, says a new study from OpenMarket.

The firm polled 500 US millennials, aged 18-34, and found they are highly accessible to businesses through SMS. In fact, 83 per cent said they open a text within 90 seconds of receiving it.

The study revealed they’d like to do more. 60 per cent of millennials said they want to be able to text their preferred businesses, but currently 20 per cent don't receive any texts from business at all.

Nearly half would like to receive fraud alerts from financial service providers (only 19 percent currently are), while 80 per cent would prefer to text a 1-800 number rather than call and go on hold.

ADAPTIVEMOBILE GREY ROUTE CONTROLS SAVED ONE OPERATOR $44 MILLION

It pays to fight back against grey routes - to the tune of tens of millions, says AdaptiveMobile.

The digital security specialist launched its Grey Route Controls service in March 2015 and reports that one of the largest mobile operators in Africa recaptured $44.4 million a year because of it.

AdaptiveMobile says the impact of grey route traffic on mobile operators could be worth up to $4 billion per year in lost revenue. Its Network Protection Platform interrogates individual messages on the basis of behaviour, reputation and content. Operators can use it to spot and curtail grey traffic.

FACEBOOK TESTS PAYMENTS INSIDE CHAT BOTS

US users of Facebook Messenger can make payments to brands inside a messaging stream

without leaving the app.

Facebook wants to move to a world in which people can have conversations with bots inside

Messenger as if they were humans. Thus, Facebook Messenger now hosts hundreds of bots.

Mostly, they answer simple questions like ‘where’s my order?’ and so on. But payments represent a step up.

But now the company has confirmed that it is testing the idea. The blog said: “Payments can now be integrated into messages, making it easy for customers to shop and purchase without leaving the app. Messages with payments utilise industry-leading controls and financial information is protected with bank-level encryption.”

Facebook expects to roll out this capability by the end of the year.

RESTAURANTS GET THEIR OWN CONVERSATIONAL COMMERCE OPTION

Two US start ups, Olo and Conversable, have teamed up to help restaurants provide menu or ordering options inside popular messaging apps.

It means customers can place orders and view live item availability by having conversations on Twitter, Kik and Facebook Messenger. They can pay via a link to a secure server which is connected to the restaurant’s POS system


Globally mobile operators are facing a shakeout in their messaging revenues as the volume of sending messages person-to-person tumbles and new technologies like chat apps with new business models continue to gain market share. The A2P messaging market on the other hand continues to grow despite the widespread practice of sending those messages via grey routes.

Here, Nick Lane, Chief Insight Analyst from Mobilesquared discusses the extent of the grey route issue based on data from its recently published report - Global A2P messaging forecasts by country 2015-2020 – putting some numbers on the potential size of the market. One of the most telling comments at the recent future of A2P messaging roundtable held by Mobilesquared in conjunction with AdaptiveMobile was that mobile operators are most interested in securing their network and protecting their subscribers from any potential threat. While we as an industry talk about the opportunity and potential billions of dollars available via A2P messaging, it is the impact of fraud that is striking the biggest chord.

What grey route traffic is remains something of a grey area, but for the purposes of this article, we shall assume it is the umbrella term for all non-commercialised messaging traffic, i.e. a commercial agreement is not in place between two mobile operators.

Mobilesquared’s research into A2P messaging highlights the negative effect grey-route traffic is having on the A2P ecosystem and mobile operator revenues in particular. On average, the A2P industry is haemorrhaging money at a rate of $13.7 billion per year to grey-route traffic.

Right now, grey-route traffic accounts for 65% of total A2P messaging yet yields approximately one-tenth of the revenue per message compared to the cost-per-message of white route. Between 2015-2020, Mobilesquared forecasts that the revenue leakage caused by grey-route messaging will cost the A2P ecosystem upwards of $82 billion.

Put another way, on average, each mobile operator is losing over $100 million over the forecast period, or $20 million per annum.

To convert that figure into mobile operator lexicon, each year $20 million worth of potentially fraudulent traffic is reaching its subscrib-ers, which could be anything between one to four billion individual SMS messages. These are messages that could be phishing, contain malware, or just irritating unsolicited marketing messages. Either way, there is a serious negative impact on the mobile operators’ brand equity and relationship with their customers, not to mention the cost of dealing with subsequent issues, such as the call centre costs associated with complaints.

The view from the roundtable was that this is just the beginning. Mobilesquared research and analysis confirms that the enterprise is

starting to understand how SMS can be used to communi-cate with its customers. So much so that they will spend an additional $4.33 billion on A2P messages globally in 2016 compared to 2015. We project the global A2P messaging market will be worth $17.21 billion by the end of this year, up from $12.88 billion in 2015. That’s year-on-year growth of 33% and we project the market to accelerate from 2017.

But as more enterprise money is invested in A2P messaging the greater the appeal for fraudulent activity. It is incum-bent on mobile operators to secure their networks and protect their subscribers. At present, the data reveals that

15% of mobile operators have invested in the platform, and that figure will be just over 50% by 2020.

Between 2015-2020, cumulative revenues for A2P messaging will be $185.5 billion. However, had all grey traffic been converted into white traffic by the start of 2015, the A2P space would generate $267.6 billion over the same period.

Nevertheless, the global A2P messaging market will be worth $58.75 billion in 2020 as mobile operators invest in next-generation SMS revenue assurance platforms to convert unwelcome and potentially fraudulent grey-route traffic into money-spinning white-route traffic.

NICK LANECHIEF INSIGHT

ANALYST AT MOBILESQUARED

MARKET FORECASTSA2P 2015-2020

THE MULTI-BILLION DOLLAR A2P MESSAGING REVENUE OPPORTUNITY

STILL A $60B MARKET?

-

10

20

30

40

50

60

70

80

2010 2011 2012 2013 2014 2015 2016 2017 2018

BIL

LIO

NS

A2P SMS REVENUES $

*BASED ON AVAILABLE INDUSTRY DATA, NOT MOBILESQUARED DATA

INDUSTRY GROWTH TO DROP FROM AN AVERAGE OF 260% YEAR-ON-YEARTO 5% YEAR-ON-YEAR FROM 2015 ONWARDS.


There’s a scene in Friends in which Joey is being typically slow to catch on to some juicy bit of gossip. As his mind whirls, exasperated Chandler can take it no more. He roars: “Get there faster!”

Consumers apparently appreciate this sentiment. ‘Getting there faster’ or rather reducing friction is a key driver of tech innovation. iTunes got consumers to music quicker than going to the store. Netflix beat Blockbuster by sidestepping the need for customers to walk to the video shop. eBay triumphed largely because PayPal made it easy to buy in one click. The list goes on.

Most of people don’t actually like to shop or buy or pay. Of course we like the end result but the actual transaction of shopping is just the bit in the middle and anything that reduces the time spent on it to the bare minimum is considered a good thing. The same goes for any kind of brand interaction: checking product details, making a complaint, finding directions etc. Classic cases of ‘get there faster’.

In the last 12 months, the noise around brand engagement and relationship building being driven by ‘conversational commerce’ has grown steadily louder. It describes people talking to brand representatives via mobile messages (whether via SMS or chat apps). And the brand representative might be a person, or it might be a ‘bot’ - AI that uses machine-learning and context to come across like a real person.

The trend came to life in 2015 when Uber integrated Facebook Messenger and enjoyed a further resurgence when Facebook opened up its Messenger app to third party chat bots earlier this year enabling developers to create bots so that people chat with organisations to get information, answer questions and transact.

From a consumer perspective, this is arguably a considerable improvement.

Take this hypothetical scenario. You’re leaving for the airport and you want to the check flight details. You could open the airline app (or indeed first go to the app store app and download the airline app), then type your login and browse various menus to find the different bits of information you need.

Alternatively you could just text your airline ‘bot’ and ask “what’s my itinerary?’ The bot already knows who you are because your phone has identified you. It replies immediately with all your details. The answer might contain links and pictures too.

From the enterprise and brand perspective it enables them to communicate with their customers in powerful new ways at reduced costs. They appear more approachable. Available 24/7. However, the highly personal nature of the

messaging environment and data being shared also means enterprises need to

ensure they are adding real value to the consumer through the interaction otherwise

the result could be negative and may cause users to move to less intrusive messaging platforms.

For a bot to be effective it must be part of a service that has already gathered information about the end user from multiple data-points so that it can understand and process personal preferences. Examples might include shopping habits, access to calendars and even more sensitive information like banking transactions. Good stewardship of personal data and full transparency will be

essential if ‘conversational commerce’ is truly to help brands engage with their customers and build better relationships. Of course consumers have shown again and again how much they like to interact via messaging. MEF recently published a study of messaging habits. It revealed that A2P text alerts have become commonplace. For example, 33% of people have received a text from their bank.

There’s also already momentum around message-based personal assistants. Companies like Operator and Magic offer people one shortcode they can text to contact ’experts to help you find what you want, when you want.’

Conversational commerce as part of an enterprise’s engagement has the potential to make significant impact radically changing customer service and call centres or reducing traffic to web pages. There has been much debate whether it has the potential to erode the dominance of apps. Only time will tell. But this consumer shift and the potential

disruption wrought by the simple power of typing a sentence into a text box should not be under estimated.

UNLOCKING THE POTENTIAL OF

CONVERSATIONALCOMMERCE

“FROM THE ENTERPRISE AND

BRAND PERSPECTIVE IT ENABLES THEM TO COMMUNICATE WITH THEIR CUSTOMERS IN

POWERFUL NEW WAYS AT REDUCED

COSTS.”

“FULL TRANSPARENCY

WILL BEESSENTIAL IF

‘CONVERSATIONALCOMMERCE’ IS

TRULY TO HELP BRANDS ENGAGE

WITH THEIRCUSTOMERS AND

BUILD BETTER RELATIONSHIPS.”

JOANNE LACEYCOO MEF


Mobile intelligence firm, Mobilesquared, has released a Databook indicating that the A2P messaging market was worth $12.88

billion in 2015 and will rise to $58.75 billion in 2020.

The same report also forecasts that the rollout of more next-generation SMS revenue assurance platforms will see

grey-route messages drop from 65% of total A2P global traffic in 2015 to 19% by 2020.

According to MEF’s messaging report, 65% of consumers communicate with businesses on chat apps; increasing to 76%

globally via SMS.

Moreover, 1 in 3 users have interacted with a financial services company via mobile messaging with authentication acting as a

key driver – 30% of consumers worldwide have confirmed passwords via text.

Globally, the banking and financial services and retail sectors are set to be major verticals and contributing more than 40% of

market share for A2P SMS market growth.

Elsewhere, Telefonica’s Text Economy Report forecasts that banks, retailers and OTT providers themselves will account for

60% of global A2P messaging traffic by 2017.

Consumers prefer SMS. According to the Direct Marketing Association poll, 44% of respondents would rather receive product

details and marketing messages via SMS. Analyst firm Statista indicates that the volume of A2P messages was 1,625 billion in 2015, and will rise to 1,762 billion by 2018.

Credence Research goes further, forecasting two trillion A2P messages a year by 2017.

The global A2P share of SMS traffic has nearly doubled in the last five years from 11.7% in 2010 up to 22.4% in 2015.

OpenMarket in collaboration with Portio Research has forecast that businesses will send over 1.7 trillion A2P messages in 2016.

A customer engagement survey by Ovum and Tata Communications showed that SMS, by a wide margin, remains

the preferred way to maintain contact with consumers with more than 50% of respondents indicating that they expected their use of SMS, email and social media to increase over the next 12-24 months.

MEF’s Future of Messaging Working Group estimates that SMiShing alone contributes $680 million to the annual $2 billion

fraud cost currently borne by mobile operators. And consumers.

Unsolicited messages threaten consumer trust. MEF’s 2016 fraud report shows that 26% of chat app users and 28% of SMS

users receive a spam message every day. And 33% have received a SMiShing (SMS phishing) message.

1

2

3

4

5

6

7

INDUSTRY TRENDS & STATISTICS

10

11

12

Beyond mobile marketing it is use cases such as authentication and

notification that are driving the messaging market.

Here’s 14 statistics thatexplore that growth.

333%

26% 24% 23%

17% 16% 15% 15%

24%

NONE OF THE

ABOVE

BANKING PROMO WEB/EMAIL EXISTING ORDER

EDUCATION BOOKING EMPLOYER HEALTH

IN THE LAST 12 MONTHS, HAVE YOU SENT OR RECEIVED A TEXT MESSAGE (SMS) OR MESSAGING APP MESSAGE TO/FROM ONE THE

FOLLOWING COMPANIES OR INSTITUTIONS

9

8 13

14


ABOUT MAHINDRA COMVIVA

Mahindra Comviva is the global leader in providing mobility solutions. It is a subsidiary of

Tech Mahindra and a part of the USD 16.5 billion Mahindra Group. With an extensive

portfolio spanning mobile finance, content, infotainment, messaging and mobile data

solutions, Mahindra Comviva enables service providers to enhance customer experience,

rationalize costs and accelerate revenue growth. Its mobility solutions are deployed by

over 130 mobile service providers and financial institutions in over 90 countries,

transforming the lives of over a billion people across the world.

For more information, please visit www.mahindracomviva.com

http://www.mahindracomviva.com

MESSAGING & SMS WORLD

NOW IN ITS 3 RD YEAR

29 & 30 November 2016, London

THE ONLY MEETING FOR THE GLOBAL MESSAGING COMMUNITY

25% DISCOUNT FOR MEF MEMBERS: USE CODE MEFSMS AT WWW.CAPACITYCONFERENCES.COM/MESSAGING-SMS

James Lasbrey Head of Wholesale MessagingTELEFÓNICA

Roy Timor-Rousso GMKANDY FRING

Simon ThorpeHead of Product TWILIO

Tony JamousPresident & Co-FounderNEXMO

Jorge Vargas Head of Strategic Partnerships WIKIMEDIA

Rob MalcolmVP Marketing & Online SalesCLX COMMUNICATIONS

@CapacityEvents | #SMSWorld

V

HEAR FROM KEY DRIVERS OF THE SMS AND MESSAGING INDUSTRY:

MESSAGING & SMS WORLD AWARDS

MEF WORKSHOP NEW VENUELANTERN MESSAGING EVENING PARTY

Associate sponsors:

Lead sponsors:

L A N T E R N M E S S A G I N G

FEATURES FOR 2016

MEF MOBILE MONEY eBULLETIN #3 15MEF MESSAGING EDITION eBULLETIN #1

GET INVOLVEDFOR MORE INFORMATION ON MEF’S FUTURE OF MESSAGING PROGRAMME VISIT:WWW.FUTUREOFMESSAGING.COM

JOIN THE DEBATEWWW.MEFMINUTE.COM

WANT TO CONTRIBUTE TO THE NEXT EDITION OF THE eBULLETIN?

CONTACT US [email protected]

mailto:[email protected]


http://mobileecosystemforum.com/mef-minute/

ebulletin #1 - mahindra comviva mahindra comviva’s head of messaging & broadband aditya dhruva...

Documents