The market dynamics impacting SMS usage see continued growth in subscribers that boost SMS volumes but bring down the price of sending one. So while users appear willing to spend more on SMS, operators must reduce the internal cost of sending these messages to keep their SMS margins from falling and to creae more revenues from the process overall.
One way is to complement the functionality provided by the traditional SMS center with the new technology and functionality of SMS routing. In the past, the sending of SMS across any network has been inherently unreliable, requiring store and re-try/forward methodology, which had an acceptable success/failure rate, though one with room for improvement.
Now, with more reliable coverage, networks and always-on handsets, it is accepted that there is around an 80% chance that a message will be delivered first time. It is also time to introduce an SMS technology solution with greater capabilities than the traditional SMSC, enabling new SMS services to be deployed and maximize the value of SMS.
SMS core network router technology augments the legacy functions of existing SMSC technology. While it replaces that part of the SMSC responsible for more efficient message delivery, traditional store and re-try/forward functionality can be left to the legacy SMSC platform to maximize existing assets. The technology offers a new layer that enables the operator to do much more than the traditional SMSC, which had previously not actually handled all the SMS terminating traffic on the network.
Capturing these terminating SMS messages, the SMS router technology enables introduction of new revenue-generating services such as personalization and also security solutions that will protect both the recipient and the network brand. With this technology, the operator can, for example, offer a messaging anti-malware security service or parental control for €3 per month.
The router enables operators to redefine their core network architecture supporting the SMS traffic, in a way disrupting the traditional SMSC model, which had previously looked at “how many” messages could be handled rather than the “different ways” in which this could be done.
For an operator, the benefits of an SMS core network router are an optimized SMS network architecture that delivers increased throughput, lower opex, and increased flexible and rule-based message control and decisions. It also provides a de facto new customer-centric SMS services capability that will ensure customer loyalty and significantly help drive ARPU upward.
For users, benefits include the facility to send and receive new time-sensitive services. They can also be reassured by opt-in spam/malware and unwanted content protection. Corporate users can also experience personalised SMS services matching the email-like experience.
Driving ARPU through personalization
The SMS router architecture enables personalization services such as copy, auto-reply, forward and out-of-office services – which are key to increasing ARPU. They offer users increased control over their communication and give operators a major differentiator from the competition.
These features inherited from email-type capabilities are all revenue-generating and cannot be enabled without the SMS core network. By intercepting mobile originated (MO) and mobile terminated (MT) SMS traffic, sponsorship with targeted advertising inserted into SMSs is also possible, with comprehensive user opt-in management. This is a key enabler for SMS personalized mobile marketing.
Also, an SMS core network router provides a highly flexible approach based on a wide set of criteria to enforce MT SMS interception on a conditional basis. This activates network-level anti-fraud and anti-spam functions as well as customer-level protection via subscriber identity masquerading.
The extensive SMS security solution relies on a two-layer approach: low-level SS7 network fraud control and the actual messaging layer analysis with spam and virus detection for full and optimal protection.
Brand protection is an absolute requirement for leading operators and mobile virtural networks operators in mature markets such as those in Western Europe and the US as well as regions where large amounts of spam and serious security issues exist such as the Middle East and Asia Pacific.
Deployments of SMS routers are accelerating in all regions, with industry estimates showing that over 150 SMS routers have so far been deployed among at least 600 GSM operators.
The market for SMS core routers remains in growth stage and is split among growth markets, mature markets and operators upgrading their networks. Growth markets are experiencing SMS traffic growth and include Latin America and Asia Pacific. Mature markets need to maximize and augment the value from SMS, which drives up ARPU. Operators whose SMSC platforms have reached an end-of-life timeframe are seeking to invest in next-generation, future-proof messaging architecture.
Increasingly, growth and emerging markets are facing the same issues as mature markets where SMS core network routers offer an ARPU-enhancing architecture and eventually enable a much easier migration to the IMS world.
From Southeast Asia -- like the Phillippines where latest data show more than 640,000 messages are being send every second -- to regions like the North America, SMS traffic volume is still rising and more efficient delivery is an absolute need. At the same time, the maturity of many markets regarding SMS forces operators to create more value from existing traffic. Whichever kind of market, all operators will derive value through the implementation of SMS routers.
Ludovic Patraud heads the product management and product marketing group at Jinny Software.