Messaging, specifically, enterprise messaging services will emerge as a strong focus area for CSPs, leading to the emergence of a few notable trends in 2016 in areas such as push notifications, virtualization, monetization of the 'grey market' and adoption of Cloud-based platforms for messaging.
#1: OPERATORS WILL PUSH FOR PUSH
In 2016 CSPs must innovate to provide their vertical A2P market with new channels for greater engagement. We’re going to see operators exploring new angles for service innovation to engage subscribers and increase loyalty. But instead of the much-heralded income from new business models derived from quad-play and content, operators will look at quick, inexpensive ways to build new revenue streams that only requires the slightest of tweaks to existing infrastructure.
One of these is push notifications. If operators can act as an enabler for brands and organizations to send Push notifications to their customers, enabled using existing infrastructure, the resulting new business models and revenue streams could be worth up to $5.8 billion next year, rising to $10.9bn by 2018.
Annual Global push notification traffic is set to explode, growing to 245bn in 2016. Meanwhile the number of app users that will have downloaded their mobile operators’ app and allow push notifications will rise to 285m in 2016. Through partnering with operators, brands can enable push notifications to be sent to subscribers via this operator app, and open up new streams of revenue in the process.
Alex Duncan,
CEO and Co-Founder,
Openmind Networks
#2: MESSAGING WILL DEVELOP ITS NFV BUSINESS CASE
NFV can deliver on the promise of reduced OPEX/CAPEX, and fast service launch whilst providing flexibility and scalability. However challenges will still remain in 2016, and as with all new technologies there will be variations in vendor implementations.
A key factor for 2016 will be inter-operability and inter-working among different NFV vendors and deployments. But the potential for NFV will remain huge, with the benefits of consolidation, service centralization and data-center optimization being key drivers. Use cases will gather further momentum in 2016, in particular vIMS core which is certain to have a major impact on VoLTE and RCS roll-outs in the coming years.
Fundamentally it will be a clear business case that will drive NFV forward in the coming years, and Openmind’s experience is that messaging is firmly an industry candidate domain for virtualisation in 2016.
#3: OPERATORS WILL TURN GREY TO PAY
Messaging is a proven and effective access channel for interactivity and engagement, and this has led to significant growth in Application to Person (A2P) Messaging for CSPs. It is estimated that the A2P market is already worth $50BN per year with a 5-6% CAGR forecast, and we predict this to grow in 2016.
But side by side with this new revenue growth has been the growth in the 'grey market' for A2P messaging. Grey market A2P, for example, is messaging traffic which is disguised as P2P traffic and therefore subject to the free/cheaper rates than where handled as A2P. Internationally originated A2P messaging revenue is specifically at risk from grey routes. In fact, it is estimated that such grey route messaging traffic results in a revenue loss of $5BN per year, with 75% of CSPs not being aware or having strategies for its prevention.
2016 Trends and Outlook Polls
We predict that 2016 will be the year that operators finally realise the threat of grey routes, and begin to monetise them.
#4: OPERATORS WILL LOOK TO THE HOSTED CLOUD
There are numerous examples where cloud platforms are fundamentally changing whole industry sectors. Cloud is also transforming communications services – for example, WhatsApp, Skype, Snapchat, etc. While these organisations steal a march, in 2016 Carriers will need to respond and enhance their own communication services using cloud-based platforms. But they can’t go it alone; many are trying to build their own cloud infrastructure but that has traditionally required complex and slow network investment roll-outs.
This will change in 2016 as operators become frustrated by the limitations on time to market and innovation. The real opportunity here is to embrace cloud for new services. To achieve the scale and velocity to compete, operators must look to hosted cloud offerings in 2016. One carrier this year, BICS, has already shown that a cloud-based communication service is possible with the recent launch of its hosted RCS service which allows service providers to quickly, easily and efficiently deploy the full range of next-generation rich communication services. The solution, combining Openmind’s Traffic Control platform and BICS’ IPX infrastructure, is based on RCS and IMS standards and allows operators to select the apps that offer the best rich communication experience for their end-users. When fully adopted, these industry standards will support a whole ecosystem of new services and enable operators to increase the speed of innovation in the sector.
About The Author:
Alex Duncan is Co-Founder of Openmind Networks Ltd., and has been its Chief Executive Officer since 2003. Duncan has led the Openmind business through significant changes from a zero revenue base to a multi-million dollar global enterprise with telecommunication customers in all parts of the world. Alex Duncan holds two Trinity College Dublin Degrees; a Master’s Degree in International Business together with a Bachelor’s Degree in Electronic Engineering.
