6 Major Difficulties Facing A2P SMS Senders

The telecom industry is undergoing tremendous change with technological advancement, competition from OTT (over-the-top) players, and growing demand for rich communication services. While P2P SMS is no longer a golden goose, A2P messaging is relevant and has many benefits, causing bulk SMS services to thrive in this age of digitization. Through A2P monetization, brands can automatically send bulk SMS to their customers with a personal touch, making it the most prominent marketing avenue across industries, from travel and tourism to healthcare.

The global A2P SMS market is projected to reach $118.44 billion by 2030 from $68.9 billion in 2021, growing at a CAGR of 5.65%. A2P messaging is widely used in BFSI, e-commerce, travel, hospitality, and entertainment sectors for customer relationship management, authentication, promotional, and interactive services. Although enterprise messaging will continue to grow, enterprises are posed with issues related to pricing, grey routes, SMS length, and regulatory violations that make A2P implementation quite challenging.

Let’s look at some biggest A2P SMS challenges and how they make A2P monetization even more critical to ensure compliance and better pricing strategy.

Top 6 A2P SMS Pitfalls and Challenges Facing Enterprises

Fraud and Malpractice Polluting SMS Channels

The A2P SMS supply chain involves many intermediary companies that look for the cheapest routes to transmit SMS traffic, causing telcos to lose out on termination fees while also making them susceptible to malpractices. Bad actors indulge in fraudulent SMS origination activities like deliberately masking A2P traffic as P2P traffic via grey routing or SIM farms, preventing telcos from profiting from bulk SMS services.

Alternatively, fraudsters can send bulk SMS to extract sensitive information through phishing or masquerading as verified senders like banks. It presents an opportunity for MNOs (mobile network operators) to capture revenue from the mobile messaging ecosystem by securing end-to-end message delivery against fraud and spam traffic.

Consumer Fatigue

Customer fatigue is one of the significant threats posed by illegitimate traffic caused by spamming and phishing, especially enterprise messages sent from trusted sender identities. Even a legitimate A2P SMS sent from an unknown sender identity, as with grey routing, can cause customer fatigue. Poor-quality texts in subscribers’ inboxes can lead to significant behavioral changes in customers who may not read or engage with business messaging over SMS.

Losing Ground to Rich Communications Services

Although SMS is the most ubiquitous communication medium with an array of benefits, it certainly needs an upgrade in guaranteed reliability, versatility, and security. Subscribers opt for more innovative and richer communication platforms because of the two major drawbacks of SMS that need to be addressed — a limit of 160 characters and a lack of rich features.

Rich communications services (RCS) offer users unlimited characters and the flexibility to send branded SMS, payments, card carousels, files, live locations, and more. This challenge poses yet another A2P monetization opportunity where operators can combine enterprise messaging with the Internet of Things (IoT) to deliver smarter texts through data centralization, resource deployment, and SMS triggers.

Complex Traffic Analysis and Segmentation

Securing SMS channels is no longer about preventing spam; operators must look at complex content classification, unwanted communications, and sending behaviors. The deep data analysis of SMS poses many practical challenges. For instance, who defines what makes up a particular type of content? The ambiguity in classification and regulation can create far more significant problems that may cause the original intent of the rule to backfire.

Classification regulations also include rules on when content can be sent because no one wants to be disturbed by promotional texts in the middle of the night. SMS senders must be aware of the type of message being sent. The liability rests with the last message-carrying company, so aggregators can be held responsible.

Huge Variation in A2P Unit Pricing

There’s a tremendous variation in unit price, even in countries with a healthy market for bulk messaging services. MNOs and partners charge different rates for companies with headquarters outside their borders, but the nature of routing and company registrations make it difficult to define ‘domestic’ and ‘international’.

A2P SMS unit prices are unsustainable in some regions where MNOs outsource their entire A2P messaging strategy to third parties, who become exclusive gatekeepers. This disengagement from MNOs causes sky-high prices. Thus, MNOs must consider setting upper price limits as a part of their legal agreements with intermediaries to prevent unsustainable proliferation in specific markets.

Well-intentioned but Poorly Executed Regulatory Rules

The A2P messaging ecosystem has a broad spectrum of regulatory inconsistencies, from light-touch regulators to regulators with strict, well-intentioned, poorly executed rules. Tightly defined regulations rarely work because it provides bad senders with a clear boundary to work around. For instance, if a country allows only 100 messages per sender identity, fraudsters will programmatically send bulk SMS based on this limit to avoid detection thresholds.

It becomes crucial for operators to monetize their A2P traffic to ensure that rules are monitored, and actions are taken when someone breaks them. Awareness of destructive sending behaviors among the stakeholders and a strong supervision strategy can help enforce compliance.

The Importance of A2P Monetization in Ensuring Compliance and Better Pricing Strategy

A2P monetization combines several strategies to leverage bulk SMS services to generate the desired revenue. It may include the installation of an SMS firewall, ring-fencing, monitoring, reporting, and partnership with a consultant. Sophisticated firewall and monitoring configurations give aggregators and MNOs the ability to distinguish between different types of traffic, making it easier to classify, analyze, and regulate traffic more effectively. It also enables operators to offer premium services with more profitable pricing models where businesses are charged based on use cases.

Flip the Switch: Turn Challenges into Opportunities to Secure A2P Revenue

Security threats force operators to shift focus from SMS revenue to regulatory compliance and industry awareness of best practices. However, enforcing strict regulations may only be worthwhile with a robust A2P monetization strategy in place. A2P monetization not only ensures better compliance but also aids smarter and premium bulk SMS services with stable pricing, easy classification, and robust supervision.

Broadband Telecom offers an operator-grade, AI-based SMS firewall solution for MNOs to keep their subscribers safe from spamming, flooding, SMiShing, virus distribution, and more.