Profit margins for mobile operators’ retail business are on the decline, forcing mobile network operators (MNOs) to break away from more traditional focuses. Wholesale business is now becoming more and more important, as the revenue generated by A2P messaging in many markets is exceeding P2P messaging revenues. So, what are the main challenges that could stand in the way of A2P messaging growth?
There’s a clear trend: subscriber revenues in the traditional retail business for MNOs are stagnating and declining. Tough competition combined with commoditized offerings keeps squeezing profit margins – which is why MNOs now need to look for other revenue streams.
Wholesale, on the other hand, has great business potential! And A2P messaging is an area that MNOs are increasingly turning towards to drive growth. The pandemic has even accelerated the growth of A2P messaging, and healthier profit margins make it an opportunity not to miss out on. Operationally, overhead costs are also usually low – it typically only requires a team of two or three people to manage. In other words, a great route to profit that doesn’t rely on retail!
But there are always pros and cons. The business of A2P messaging has its own set of challenges – external as well as internal. Let’s take a look at some of them.
As A2P traffic trends increase, this area of wholesale messaging will have an ever-more important role for MNOs as revenue generators and margin contributors. With the transition to 5G and future generations of mobile networks, MNOs must now take steps to protect the SMS messaging channel to ensure both today’s revenue and future business.
In SMS, MNOs already own a valuable messaging channel between enterprises and consumers. Investing in the Sinch A2P monetization service provides them with total management and control of their A2P business. It’s proven to dial down revenue leakage, has a massive impact on grey routes, and puts MNOs in the perfect position to make the most of the shift towards richer communication formats.
As A2P messaging becomes increasingly more important for mobile network operators to drive growth, you need to ensure you capture your share of the growing enterprise messaging market. Download our guideto learn more about what you can do to seize the wholesale business opportunity.
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