The SMS value chain is broken! by Tony Jamous, Founder and CEO Nexmo

nexmoAs revenues from person to person messaging continue to be cannibalized by over the top applications, the carrier community has started to increasingly focus on monetizing application to person messaging. A2P (Application to Person) revenues are expected to become the largest share of carriers’ messaging revenues. According to IDC the A2P messaging market is large at $23.4 billion in 2014, and it is growing at a compound annual growth rate of 8% through 2019.

However, the fact is that the carrier network is not designed to allow business critical A2P messaging at scale. SMS, and its infrastructure for instance has been designed for person to person. Actually, SMS uses the signalling network which is not designed for communication at all.

So what does this mean for developers? There are 5 challenges that face software developers when attempting to integrate a messaging service into their apps.

  • Latency: Messages are sent through multi-hub routes that can significantly impact the delivery time of a message. Limited capacities of A2P SMSCs, combined with peak volume, will lead – often on a daily basis – to massive queues.
  • Security: Business sensitive material is copied at each hub and can be viewed by anyone with access to those copies. Some messages can cross multiple continents before reaching the final carriers and data security regulations differ by jurisdiction.
  • Deliverability: Each hop messages take creates a potential point-of-failure and could prevent message from being delivered. The least cost routing behaviour of the industry leads to frequent switching of routes and exasperate the deliverability issues.
  • Compliance: You might not know that the content you are sending is illegal or politically sensitive in some countries.
  • Visibility: Quality customer care is next to impossible because you have limited visibility that is often inaccurate or fake. Take, for instance, handset delivery confirmations that are often faked due to inaccurate spam filters.

(Editors Note: Tony from Nexmo will be presenting on day one (17th Nov) of TADSummit from 11:20-11:40)

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