It may come as a surprise, especially coming off the hype of CES, but rather than investing in IoT or operator OTT apps, the most popular near term monetization strategy identified by operators is A2P SMS followed by Mobile Number Portability (MNP) and Mobile Phone Verification (MPV) traffic and services. Much less sexy but significantly more important, portability and verification services have emerged on the back of A2P SMS activity and are presenting promising new traffic monetization opportunities.
Although, before operators can capitalize on A2P SMS, or verification traffic, they need to gain better visibility into its own network traffic to effectively monetize. A recent mobilesquared survey uncovered 75% of MNOs do not have measures in place to view, control and monetize traffic traversing its network. Operator pipes are currently clogged with grey routes, or indistinguishable SMS traffic with no commercial agreements with MNOs, leaving only a small portion of the network open to legitimate and billable traffic.
Without the sufficient network security tools in place to provide transparency into network traffic, MNOs are losing out on a holistic monetization strategy and compromising subscriber privacy and security.
What are they?
Both Mobile Phone Verification (MPV) and Mobile Number Portability (MNP) are core operator assets that can be used to enhance quality and security of A2P SMS as well as other enterprise use cases that are time sensitive and mission critical. They’re also presenting their own revenue opportunities for operators who are struggling to cope with declining person-to-person (P2P) messaging traffic and revenue.
So what are they exactly?
Mobile Phone Verification (MPV) is the process of authenticating a mobile phone number through the MNO’s network using the HLR (Home Location Register) in real-time. The service is becoming increasingly prevalent in the enterprise to ensure A2P SMS is delivered to the correct number. It also provides critical information about roaming status or if the phone is turned on to help improve open rates as well as conversions.
Mobile Number Portability (MNP) is when a mobile user switches service providers but retains their existing mobile number. The portability data provides critical information about a subscriber phone number by accessing the MNP database or querying the mobile network in real-time, such as the associated host operator to enable efficient routing for both A2P messaging and voice calls.
Opportunities with Verification and Ported Numbers
According to the survey data, 56% of operator respondents are already monetizing MNP and MPV services and 11% are planning to monetize over the next 12 months. This number is subject to increase as more mobile operators realize the revenue opportunity and form a monetization strategy.
The survey went on to find that 80% of operators believe portability and verification services will positively impact their A2P SMS business, due to the data and phone number intelligence they’re able to provide. In fact, 20% of respondents believe the mobile services will limit the level of spam delivered to their subscribers, which was identified as the biggest threat to the A2P SMS, according to operators surveyed.
Privacy & Security Requires Transparency
Despite the opportunity, respondents were split on revenue potential and concerns with subscriber privacy and security. Just below 45% of mobile operator respondents recognized the revenue potential of the two mobile services, but were equally concerned with subscriber privacy. One-third of respondents also believed MNP and MPV could potentially pose a security risk, while the same percentage of respondents also identified the services as a marketing tool.
To help address privacy and security concerns while still monetizing the services, operators require network transparency to identify legitimate use cases such as verification lookups used for two-factor authentication from the bad, illegitimate traffic. However, up to this point 66% of operators had no visibility into its own network, undermining the operator’s ability to control quality and enhance security efforts necessary for realizing the revenue potential.
All Traffic and Look Ups Must be Filtered: Enter SMS Firewalls
The key to monetizing these core assets is next generation SMS firewalls. Like all A2P SMS traffic, portability and verification traffic must be filtered to ensure it’s clean and coming from legitimate traffic sources. Not only do SMS firewalls allow operators to block grey routes, but they also improve routing efficiency, adding value to operator’s offerings to enterprises.
Of those mobile operator respondents that are currently monetizing MNP and MPV today, 33% use firewalls and more than half (60%) reported drastic reduction in unauthorized messaging traffic and an improvement in revenue. Additionally, operators using SMS firewalls are able to leverage traffic analytics to assess market demands and pinpoint activities with revenue potential.
While the hype of next generation mobile innovations are eye catching, operators are in no place to ignore the real revenue opportunities rising in the A2P messaging market. Looking beyond just A2P SMS, operators should approach portability and verification services in a new light – as both a monetization strategy as well as an efficient routing tool.