Exploiting the Existing - Making the Most of and Further Monetising Your Messaging Infrastructure
While the mobile device user is overwhelmed with choice when it comes to which messaging and communication channels to use today, for the foreseeable future there will still only be one messaging channel that the majority of users will fall back to, and that is SMS!
While it is predicted there will be 913 million unique mobile over the top (OTT) messaging users by the end of 2013, with OTT messaging traffic eclipsing that of SMS, the reliability and global ubiquity of text means it will continue to lead as a core way of communicating for nearly 6 billion global mobile users, irrespective of their device or network. In fact, SMS is generating $254,664 US dollars in revenue every minute in 2013, that’s day and night, 365 days a year. This will amount to approximately $133.9 billion US dollars in revenue for mobile operators this year alone, compared to just the $22.7 billion US dollars which will be generated by all the OTT applications put together in 2013.
Therefore, when it comes to making money, SMS still rules the roost and will do for the foreseeable future. However, as competitive pressures continue to drive down operators’ pricing, and as overall industry revenues start to fall, it’s becoming more important than ever for operators to exploit their existing infrastructure and systematically tap into every possible source of potential income from subscribers, while offering strong value.
With this in mind, what more can be done to ensure that operators can still add value to the much loved SMS service, while maintaining its revenue throughput, especially in a world where we are witnessing the rise and rise of OTT services.
Keeping Prepaid Users Connected
One key route to take is to ensure mobile users, particularly those that are on prepaid services, are always able to send and receive SMS messages, even when they are out of credit. Today, globally, 75% of mobile users are prepaid subscribers who can typically exhaust their account credit some time before their usual recharge at the end of the month. The impact of this is that, on average, an operator can have approximately 10 million messages per month for which they can never guarantee the revenue – a lack of credit is usually responsible for the majority of these non-revenue generating messages. When this is applied across a broad subscriber base it equates to millions of lost messages and millions in loss of revenue - globally.
For operators, the ability to put the pieces of the puzzle together and find the balance between enabling prepaid subscribers to continue messaging even when they’re out of credit, and also making revenue, may have just become a little easier. The answer is to try and keep everyone connected – even when credit is low or no go.
How to Collect – The Route to Protect Revenue and Exploit the Existing!
Today there are many services on the market that operators can launch to their customer base, which ensure users can still communicate even when low or out of credit. One such route is installing Collect SMS and Sponsored Collect SMS services - highly effective mechanisms for reviving revenues.
These types of services provide a win-win solution for both operators and mobile users and also, in some instances, third party advertisers. With Collect SMS for example, if a user is out of pre-pay credit, they can ask a contact to accept the charges of their SMS. If the contact agrees the message can be billed. The result is additional, chargeable SMS traffic and secured revenue for the operator!
Sponsored Collect SMS on the other hand means the message is paid for and delivered through a third party advertising message. For example, when an out-of-credit user sends a Collect SMS message to a recipient who is also out-of-credit, the service tells the recipient that they can opt in to advertising sponsored message/s providing enough credits to accept their Collect SMS message and respond. For an operator revenue is generated both from advertisers and from associated value added services such as targeting and reporting. Advertisers can also use this approach as part of their marketing activity to generate awareness, offer coupons and communicate special offers.
By lifting existing credit restrictions for mobile users, Collect SMS services ensure users can always stay in touch – particularly useful in emergency situations or for youngsters needing to reach their parents. For operators, they can recoup the untouched revenue lost from a message that under normal low or no credit circumstances would have never been sent.
Putting this into context, at one operator, over 10 million SMS messages were being rejected each month due to lack or no credit. After a Collect SMS service was deployed, 30% of these were re-sent, and 50% accepted, resulting in an additional 1.5 million billable messages and $900,000 in revenue. Also, an average of 8-10% of all Collect SMS messages are never delivered due to the recipient not having enough credit, so Sponsored Collect SMS creates a resolution to this scenario – meaning someone is always picking up the bill.
Another related SMS service which helps operators drive up messaging volumes among their out-of-credit users, while also levying value-added charges and exploiting the current network infrastructure is "IOU" (I owe you) SMS. This service enables prepaid users to take out a bridging loan of text messages until their next top up, when the operator deducts those messages plus any additional service fees. As well as helping operators continue growing incremental revenue, this is perceived by customers as a powerful benefit, giving them peace of mind that they need never be out of touch.
As an operator, you can also enable customers to gift one or more prepaid messages if they have credit. Gift SMS and Prepaid SMS Reply, services can prove highly popular both with businesses, and also among friends and families. By providing a gift SMS packages, customers can send a Gift SMS to a contact, who is notified of the number of SMS credits gifted and how to use them. Gift SMS is particularly useful for parents who want to be sure their child has arrived safely or can keep in touch, or in a situation where someone needs to be in touch but can’t top up.
Businesses can also prepay for SMS replies as a reward to customers or an easy way for customers to contact customer services or provide feedback, supporting the generation of sales and greatly reducing the costs associated with missed appointments, for example. Operators can charge premium rates for both these services as they provide both peace-of-mind and tangible financial advantages for businesses. Moreover, the services can be launched to everyone immediately, are very easy to use and therefore very popular, so generate strong revenues.
Finally, for operators concerned about the increasing tendency towards “flashing”, where people contrive to get contacts to call them back by ringing their number once before hanging up, a service such as Call Me sends a free SMS instead. Flashing has become socially ingrained in some emerging markets, representing up to 30% of all calls, and wastes valuable voice network resources while being completely unbillable. Transferring that traffic onto the messaging network delivers strong cost savings while also providing a valuable customer benefit, and still enables operators to generate revenues as usual based on call minutes.
All of these low credit messaging services are available for quick and easy deployment from Acision, with no additional network infrastructure, and also from Acision’s cloud. This means operators can continue to exploit the value in their network, see further financial rewards from SMS and also drive up customer satisfaction and loyalty, as users can continue to communicate and stay in touch when even out of credit. Cloud deployment also means even faster installation reduced total cost of ownership from minimal license, support and maintenance costs, and lower operating and personnel costs.
With Acision’s network, tool set and expertise, operators can successfully implement these service innovations that have the potential to generate substantial revenue growth for them from day one and allow their subscribers to benefit from new mobile service offerings that ultimately help to drive greater retention of their paying subscriber base – by exploiting the existing operators can stay relevant and slow the decline in SMS revenue leakage even in today’s OTT driven world.
To learn more about Acision's Award-Winning Collect SMS and other commercial services that exploit the existing, please select one of the Downloads on the right hand side.
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Source: Portio Research 2013
Source: WCIS Database 2011
Acision wins Best Emerging Market Product at World Vendor Awards 2012