Increasing revenue during uncertain times

Thursday 21 May 2020 | Associate Member | Member Resources |

Increasing revenue during uncertain times image

by Mark Heaven, CCO at GMS

The Covid-19 pandemic and the ensuing quarantine and lockdown, is resulting in uncertainty for many companies. Mobile operators are no different, with MNOs across the globe seeing a drop in revenues as subscribers and enterprise partners alike change their behaviour.  According to Capacity, the damage could be as bad as $51bn.

The challenge of the quarantine

MNOs face several challenges. Roaming revenues are reduced as users are no longer travelling and making international calls and texts. Secondly, prepay revenue is reduced as many users see their incomes fall. Or they simply cannot physically top-up during quarantine.

Meanwhile, SMS messaging traffic is showing fluctuations as subscriber and enterprise usage changes. With many businesses closed, fewer promotional messages are being sent as retailers tighten their belts. This has an obvious knock-on effect on operators’ messaging revenues.

We hope to see a recovery as restrictions gradually loosen and businesses return to normal. Still, it is far from clear how fast any recovery will be, as enterprises are conscious of their own income, and some have ceased trading entirely.

Conversely, international messaging has seen an increase in some areas. Mobile has proven to be, after all, a vital channel during lockdown. The move to remote work in most countries has caused an uptick in OTP messages for various platforms. Social media apps are also increasing their authentication and registration messaging, as people turn to new sources of connection to combat isolation.

What does this mean for the MNO?

Before the pandemic and ensuing quarantine, many operators had plans for expanding their services or developing their networks. Digitisation, 5G deployments, and enabling RCS – among other things – were supposed to improve business. However, pressures on revenue have meant that in most cases such projects have had to be postponed or delayed

Fortunately, the fluctuations in messaging traffic point the way to recouping and stabilising revenues. Many operators already have different pricing for international and domestic traffic, and this forms the basis of one path to quarantine recovery.

Properly monetised and protected, international traffic can provide a stable and highly profitable income stream. For those networks that have never monetised their traffic, this is especially true, as they will realise revenues that existed in potential even before the present crisis.

Untapped potential

A lot of MNOs haven’t fully optimised their SMS messaging business and don’t fully realise the potential – typically 20% to 30% growth without any investment.

Revenue leakage can be caused by something as simple as a lack of visibility regarding traffic volumes and sources, or as complex as SIM boxes and routing fraud. It can also come from an MNO’s inability to maximise the value of their Firewall due to a lack of time or skills.

GMS articulates and implements operator-friendly monetisation policies that maximise revenues from the messaging business. Over the years we have come to appreciate how much messaging can add to an operator’s business – if properly managed.

This means analysing the security of the SMS channel (including addressing grey routes and fraud), segregating traffic and charging for it appropriately, and addressing legal/commercial loopholes. More importantly, monetisation can be done quickly without investments, particularly relevant at the present time.

Why now?

With revenues down and a difficult recovery on the horizon, securing and monetising existing SMS traffic will provide another source of income while mitigating current market volatility.

It is possible to secure and revitalise the messaging business with zero CAPEX and little to no OPEX, ensuring a quick and efficient rollout. This ensures that MNOs can reap the full benefits at the earliest opportunity.

The lockdown itself poses no significant problems. The processes involved in a managed services project can be implemented without a physical presence. There is no need for technicians to make onsite visits, and commercial and legal analysis can be completed remotely.

As a consequence, GMS has already launched several active projects, including some proof-of-concepts that are exceeding expectations.

Seizing the opportunity

Weathering the challenges posed by the quarantine doesn’t have to mean cutting costs or delaying plans. Instead, MNOs can leverage expert knowledge and market insights to make better use of the resources and opportunities already available.

Utilising monetisation and managed services to maximise your SMS Firewall investment is a quick and cost-effective opportunity to ease the pressure on declining revenues and planned investments.