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Trends in messaging networks 2022

2022 has been an interesting year across a number of areas in messaging networks. Not only are we seeing the advancement of 5G penetration and CPAAS rollout but we are also seeing ongoing issues in revenue leakage from fraud activities that are undermining consumer confidence in A2P messaging. 

Let’s take a look at some of the trendlines 2022 as a way of taking stock and readying ourselves for what is to come in 2023.

  1. The rise and rise of CPAAS
  2. The endurance of SMS in the 5G era
  3. The growth of SMS fraud

The rise and rise of CPAAS 

A recent talk by Nick Lane of Mobile Squared at the MEF Connects Conference in London assessed the current state of play with CPAAS provision to the marketplace. Of the current CPAAS offerings 74% are from a messaging background, The remaining 26% are made up of Voice, CRM and Software providers. When we look at the CPAAS offering then it is no surprise that SMS still dominates with 87% of providers including SMS in their mix. Whatsapp is the next most common at 64%. Lane suggested in his talk that SMS will continue to be a dominant channel in CPAAS offerings well into the 20’s. This should be no surprise considering SMS is still the only system that has guaranteed delivery and is present on all mobile devices.

Of course, many P2P users rather use OTT solutions like Whatsapp, Viber and Signal and business users now understand that it is critical to give their customers options to receive messages on a variety of platforms. Brands are, even now, running omnichannel campaigns to their customers for product promotion, verification and many other purposes. This trend is likely to continue in 2023 as CPAAS matures.

The potential within text message campaigns for brands is huge. Multi-media video, images and product offers are bringing messaging back into the marketing mix for enterprises wanting to engage customers on their phones. The level of personalization that is possible with CPAAS platforms ensures brands can improve their targeting of customers to take into account their past behaviours and buying history. 

Finally, CPAAS allows for customers to reply to messages directly initiating a conversation with the brand. This dual-communication channel has the potential to be transformational in increasing sales to inactive previous customers. 

The endurance of SMS into the 5G era

A few years ago it would not have been thought possible that SMS messaging would be so critical in the 5G era. However, SMS is still the only way to reliably communicate with the 5 billion plus consumers directly on their mobile devices. Messaging services like Whatsapp or WeChat simply do not have the same global penetration. 

SMS networks have the global coverage and, critically, the capacity to support the huge increase in IoT machines in the coming years. In fact, IoT devices are expected to quadruple in number by 2025. 

IoT devices are usually battery powered so power saving techniques are essential. Keeping a permanent connection open to the IoT device over IP means wasting power when the device is not in active use. SMS can get around this by ‘waking-up’ dormant or inactive devices. 

SMS does not require a permanent connection to IoT devices other than the basic radio layer. SMS messages that don’t deliver initially because a device is switched off or out of coverage are stored until the device becomes available. IoT devices also have a clear identity that is pre-authenticated so there is no need to authenticate it in the connection process. All of this means SMS-operated machines have a battery life measured in years rather than hours.

Mobile operators can respond to this growing opportunity as SMS is still very much a core service with strong revenue potential as we transition into the 5G era.

The growth of SMS Fraud 

SMS fraud was reported to have lost consumers more than $5.8 billion in the US alone in 2021. This is a significant increase on 2020. This is probably as a result of the increased activity in online ordering during the pandemic. 

SMS smishing alone was responsible for a staggering $2.3 billion in fraud in that period. To take a look through your SMS messages on your mobile makes it obvious that we are all being targeted with broad-based impostor scams. 

This type of activity on the SMS network, of course, undermines consumer confidence in the medium which is damaging for the industry as a whole. That is why MNOs need to be proactive in stamping out SMS fraud even if it is ultimately the enterprise businesses which they serve that are the ones who might get the blame from the end-consumer. 

A strong layer of SMS anti-fraud protection will deter fraudsters in most cases to a point where the networks can get cleaned up and businesses can feel more confident in using these networks to communicate with their customers. 

More indirectly, but just as damaging can be the use of ‘grey routes’ into SMS networks to try to avoid higher rate international connection charges. The loss of legitimate revenue for MNOs could be passed on to end customers as they attempt to recover lost revenue and this is something that we should try to avoid.

Using advanced SIM box detection techniques and security services to monitor traffic can avoid this issue and deter these practices from happening in the first place. 

Do you have an opinion?

We hope this overview of some of the key trends we have seen in the messaging industry this year has been useful. If you have suggestions on other trends for us to bring to the attention of the industry please do get in touch with your insights. We are part of a small community of messaging experts worldwide who will have a large part to play in the coming technology evolution so information sharing is critical. 

If you would like to talk about all things messaging or enquire about Openmind’s range of services that assist in 5G rollout, CPAAS, SMS security and, of course, core networks just hit the ‘Talk to us’ button today. 

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