Challenges and opportunities for MNOs to address revenue goals
The telecom industry is undergoing seismic shifts. Investments in consecutive generations of technology are no more a guarantee of a return on capital expenditure. Simultaneously, digital start-ups are overturning traditional products and services of communications service providers (CSPs). Given this state of disruption, Telco’s need to look at all means to increase revenue and safeguard sustainability.
The opportunities from the web
One interesting area of opportunity is opened up by the internet. This is ironic since data is being seen as the voice-killer in many ways. But clearly, the reality is a bit more complex.
MNOs became a part of the Internet environment with the arrival of mobile broadband services. Interconnectedness arrived between few elements of MNO networks, like Short Message Service Centres (SMSCs), encompassed IF interfaces, and unlocked e-mail-to-text and text-to-email messaging. This evolution opened up some opportunities and some risks too.
SMS messaging is susceptible to identity spoofing, faking, spam, and denial-of-service (DoS) attacks. These openings WILL compromise customer experience and satisfaction. Revenues are also under attack from grey routes, which carry the traffic that cannot be billed because they are not subject to contractual agreements.
As per a report by Tyntec, 66% percent of messaging traffic is on gray routes
The focus is growing on protecting the space, even as the openings for revenue gain are emerging.
Messaging has evolved from simple messaging, like notifications and alerts, to real-time user authentication, ticketing, and mobile payment enablement. These new messaging set-ups are deeply tied to a consumer’s identity on the MNO’s network and demand strict adherence to high service quality levels. (For instance, message sources and destinations must be validated, message delivery must be well-timed and dependable) In fact, consumer requirements have rapidly evolved to now wanting real-time two-factor authentication across a variety of apps and app-driven services.
It’s clear that MNO services are likely to be leveraged more and more to validate a user’s identity on the app ecosystem. That suggests the MNO’s role is more than merely that of an access provider.
Other technologies that depend on MNOs are also becoming more mainstream.
Opportunities from IoT
Consider the Internet of Things (IoT) infrastructure, which heavily depends on the coverage and access of the MNO. IoT networks employ MNO infrastructure for main or backup access. IoT devices communicate with platforms, data analytics engines, and central controllers all the time. They send data out and get instructions back. Security protocols would run on the network. Control messages to the devices would also utilize the MNO network.
By some estimates, there will be 35 billion IoT devices installed worldwide by the end of 2020. This massive growth of IoT presents yet another opportunity for revenue generation to MNOs.
The SMS Firewall: Allowing apt monetizing of Application-to-Person (A2P) Messaging
In previous blogs, we have spoken of how enterprise messaging is a real opportunity for MNOs to maintain and increase their messaging revenue. But this is a risk too. Intermediary entities are attracted to the opening to manipulate mobile operators’ security and revenue assurance gaps to evade costs and send unwanted messages.
Mobile carriers did take some steps to safeguard their networks by employing antispam filters and easy blocking mechanisms but they need to do more to enable end-to-end protection. Solutions based on content authentication and reporting also exist. But a comprehensive SMS firewall solution ensures visibility, efficacy, and proactive action.
More traditional areas
Obviously, there is a need to protect the traditional sources of revenue too – voice and SMS. Leaving aside more complex problems like how to drive up usage, there is sufficient room for maximizing the revenue potential of the current subscriber base by reducing fraud.
A good anti-fraud voice solution will allow the MNO to detect inbound and outbound voice call frauds and take the required preventive measures to block such activity. Over time, this will help drive up consumer confidence and trust -all good for sustained relationships and enhanced usage.
As mentioned while talking about A2P SMS fraud, a good SMS solution will be able to actively monitor and blog MO and MT SMSs to prevent fraud and spam SMS activity. This ensures the consumers get only the messages they value and increases their trust in the system.
A drag on prepaid revenue-generating activity is zero-balance subscribers. They sit on the books, but until they recharge, they are unable to deliver any revenues. Rather than treat them as lost causes, MNOs can deploy innovative solutions that help generate some transactions. For instance, a service could generate a missed call on behalf of the zero-balance subscriber and induce a call back with revenue potential.
The enterprise as a revenue source
Enterprises have long been great sources of revenue for MNOs with their use of solutions like International Toll-Free numbers and Premium Numbers. Those services are well-known but there’s innovation-driven evolution possible in the service needs of enterprises too.
Enterprise functions like customer service, marketing, and sales are potential consumers of solutions like bulk and auto-diallers, virtual roaming numbers, and collaboration, and conferencing solutions. MNOs have the infrastructure capacity and the skill and experience of managing complex IT backbones and infrastructure. It’s a small step from there to monetizing that capacity by offering data center, cloud computing, and infrastructure support to enterprises in an on-demand model.
That apart, more collaborative and inventive business models are emerging as MNOs come to understand that the greatest asset they possess may be the data they have about millions of consumers and their habits. They are looking to monetize that data to good effect. For instance, telecom operators are building innovative partnerships with consumer product companies and financial services companies to drive up sales and revenues. This is an exciting space with great promise.
Telecom companies are a part of the essential fabric of economic activity in the modern economy. Even as specific revenue opportunities and threats emerge, it’s fair to expect telcos to carry on.