We have two different offerings, the first focusses on the switch from SMS to IP-based messaging. Our product allows mobile operators to launch their own messaging applications, similar to over-the-top (OTT) applications that use IP messaging. It has features such as group chats, video and location sharing. These type of rich features are not available on standard SMS. But because mobile operators also provide SMS, we try to weave SMS together with IP applications; so you can get all of your SMS messages, as well as these rich, OTT messages, all in one application. Companies like WhatsApp and Facebook cannot do that because they don’t control SMS, and to do that through a third party provider would be too expensive.
The second service we provide is Magic Words; a contextual content-engine for messaging. When messages go into the cloud we start to build an analysis of what conversations are about, where people are, and then give them useful bits of information, woven into those conversations. For example, if there are four of us meeting for dinner after work, we can create a link to recommended restaurants in that location, and if somebody is perhaps coming from further afield we could check their train times. We are trying to bring together things that we can all do on our smartphones by using many different apps, and instead create one comprehensive app.
Are there still SMS revenue opportunities for operators?
Yes. Television, for example, did not replace radio and these OTT applications are a supplement on a different channel. They’re additives. It is true that as consumers move to these OTT applications, they are not only richer from a feature perspective but they are also free or significantly cheaper than using SMS. This puts pressure on operators, which find it harder and harder to charge consumers for a text message. In some places SMS volumes are going up, in some places they’re falling, but I think universally it is now harder to charge for SMS in the same way.
However, I still think most consumers see the value in SMS. Many consumers have multiple OTT messaging apps which they switch between depending on who they are messaging or where they are, but if people urgently want a response, SMS is still perhaps the best and most reliable channel. People are more likely to pay attention than if it were a Facebook notification. I think SMS is still part of the mix, and as we move into application-to-person (A2P) messaging, there are new opportunities there as well.
I think the struggle for operators has probably been around innovation. Whereas they controlled calling and messaging five years ago, that is not true today. Most of the innovation today is coming out of independent companies, not the mobile operators. I think the challenge for operators is how to stay relevant, and that is something we can provide. By acting more like an outside company, we can roll out features much quicker than an operator could do if they tried to build services themselves. It is one of the drivers that makes our operator partners want to work with us.
What do you hope to get from attending Capacity’s new Wholesale Messaging and SMS event?
Most of our success has been in North America because that is where we’re based, and we also have a lot of activity in Asia, including five mobile operator partners in India. Traditionally we have not had a great amount of traction in Europe and this is partly because the European GSMA operators are focussed on Rich Communications Services (RCS) and Joyn [a GSMA-backed service designed to help operators deliver RCS such as voice, video and instant messaging to their customers].
But in the last 12 months we have had a lot of interesting conversations and progress in Europe so I hope that the conference in London will be more of that dialogue. I think there are differing opinions on joyn and RCS; it is going a lot slower than people expected and is not working the way people initially expected, so I think operators in Europe are looking for new solutions as well.
