Text Messaging 4 Businesses – The Rise of the Machines

Press release – November 3, 2015

By Rob Bamforth, Quocirca for Computer Weekly

Now that so many people have smartphones, mobile network data plans have become more generous and instant messaging has sprouted everywhere from being embedded in social networks to tools like Skype, WeChat, WhatsApp and Viber, what does the future hold for SMS?

Blossoming since the first festive text greeting in December 1992, this twenty something year old technology is starting to feel its age. Sure it has been hugely popular with massive peaks on special days like New Year and Valentines day, but usage declined in 2013 for the first time in two decades.

It has been clear for many years with the growth of an open and mobile internet that person to person (P2P) SMS would start to decline eventually, both in volume and revenue, and the industry set about picking up the slack with the use of automated or application generated messages sent to people (A2P).

This has not been plain sailing, and five years ago it looked particularly bad as many exploited the opportunity of sending bulk SMS, often coming in through ‘grey’ (non fully sanctioned) routes at very low costs, as a way of delivering mobile SPAM messages. This was not a good experience for the users and did not really drive significant benefit for the legitimate businesses sending out messages. It might not have had the volume impact on operator networks that email SPAM does on internet service provider networks, but the negative effect on subscribers meant that eventually operators needed to act.

While SMS spam has not entirely disappeared, it is now much diminished as mobile operators have taken much more control of messages on their networks with traffic inspection and filtering. Rogue or grey routes into mobile networks can now be spotted and stopped within a matter of hours not weeks or months, as might have been the case in the past.

This has all been to the overall benefit for the A2P sector as it has focussed attention on getting value rather than just volume from A2P messaging. Recent studies predict steady if not stellar growth of A2P SMS of just over 4% compound annual growth to the end of the decade. Some of the volume will continue to be the legacy of mobile marketing, with further use of promotional messaging, polls and campaigns that drive awareness in a non-SPAM-like way, but where are the main application growth drivers?

There are several strong use cases, but they need to be treated separately as each has distinct characteristics – not all messages are the same.

Many uses are in the enterprise, where the key in a world of information and email overload is to get critical messages received and understood. A text message generally grabs people’s attention more readily than an email and so it becomes a great way to notify changes in time dependent aspects of business processes. These could be alerts when things are going wrong e.g. running out of stock, temperature in fridge rising above a threshold, or might be timely information or notifications of things of interest, such as a forthcoming delivery.

For some applications, the lack of need for cellular data (3G/4G) means greater coverage potential as it extends deployments to be able to use ‘old’ 2G networks, where ‘things’ can run on minimal energy and modems only power up when they need to send a message. For example remote street furniture and signage could send text messages when lights fail – too simple to require a micro controller and internet connection, but a message would be useful to set in train a maintenance visit.

A2P SMS use cases do not have to be one-way. Some logistics companies send simple SMS requests to customers about suitable delivery options and have them confirm or reschedule with a simple response. This concept also works well in areas such as healthcare, where scheduling and shifting appointments can be complex and costly when visits are missed. Other organisations are using SMS responses to automated messages to get instant feedback on service quality or on offers or advertising. These would all be possible to do with email, but the crispness and brevity of SMS lowers the impact on the person responding and allows them to do it there and then with ease.

SMS has also taken a much greater role in supporting security. Its use as an out-of-band channel to deliver one time passcode to users wherever they are provides a second factor of authentication when logging in to use enterprise resources or critical external services such as mobile banking. Rather than having to remember to carry special physical tokens, the mobile phone will generally be carried everywhere and has its unique SIM independent of how a device might be connected to a network via an IP address.

All of these use cases rely on a message getting through, and in a timely manner, wherever the user is located – SMS makes that easy. A2P applications no longer look risky or problematic in the way that bulk SMS once often appeared, and mobile network operators are now seeing A2P as a welcome revenue potential – especially important as SMS has historically formed a large element of operator revenues.

With all the current hype about the IoT, mobility and interconnected everything, something important risks being missed. It is not simply about the connection, but the purpose – that is the message. It is all about the intent to meet a business imperative, so it is vital that the message gets through to the right recipient at the right time and in a way that they can deal with it.

In this regard, with operator support and the right business use cases, SMS still delivers.