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May 11, 2017

How Can Telecom Carriers Compete with OTT Messaging Providers?

Over the last several years, the over-the-top (OTT) messaging market has experienced significant growth while telecommunications providers have fallen behind the competition.

Services like WhatsApp, Viber and iMessage, for instance, now represent more than 80 percent of all messaging traffic. And according to PWC, telecommunications carriers are paying a big price. Service revenues across the industry have fallen by as much as 30 percent in SMS messaging, 20 percent in international voice and 15 percent in roaming.

So, why are carriers having a hard time profiting from SMS and MMS services?

For many carriers, the problem comes down to marketing and resource allocation. For the average carrier, mobile messaging is just one service offered alongside many others like voice, data and broadband. It’s hard to compete with a dedicated messaging and voice provider.

But there is another issue at play here that is hurting carriers, and that is backend operational inefficiencies. Carriers still lack real-time visibility into critical metrics like international supplier costs and codes, which fluctuate constantly.  This in turn negatively impacts QoS and billing, and makes it harder to effectively perform least cost routing. Because the market changes so frequently, comprehensive analysis needs to take place on a real-time basis in order to maintain an accurate bottom line.

One company that is working to make a difference in this space is Orca Wave. This company, which will be on hand at the Global Messaging Summit (May 14 in Chicago), streamlines messaging management for carriers, offering features like comprehensive revenue assurance, cost and code management and profitability management. Orca Wave also auto-loads supplier cost and code sheets, and the software contains a built-in error analysis feature that can pinpoint problems like missing data, or duplicate entries. It even comes with a special blacklisting feature for filtering carrier routes.

What’s more, the company is involved in another exciting technology that has tremendous revenue-driving potential: Application to Person (A2P), which makes it possible to distribute messages from an application to a group of mobile subscribers.

Equipped with A2P technology, carriers can add extra functionality to their customers’ applications. Imagine a retail chain, for instance, that wants to send push notifications to its customers about new products or deals. This can be easily and seamlessly deployed with an A2P setup.

How big of an opportunity is A2P messaging? By 2020, the market could reach $70 billion.

So while telecommunications providers may have some catching up to do in the mobile messaging space, the technology is now in place to expedite the process — and in doing so, reduce costs and offer better services to consumers.

Edited by Alicia Young

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