The introduction of an Application-to-Person (A2P) SMS interconnect fee will be a “pleasant surprise” for businesses despite the increasing SMS costs, according to Pieter Streicher, managing director of BulkSMS.com.
HumanIPO reported in May Streicher said SMS as a communication medium is still very much alive, particularly for business messaging and that the shift towards third party providers is purely for social reasons.
“Businesses that shrugged their shoulders in resignation at the thought of an increase in SMS costs thanks to the introduction of an A2P SMS interconnect fee are in for a pleasant surprise. Somewhat counter-intuitively, the arrival of an SMS interconnect fee generally results in lowered prices, and exactly that has happened in South Africa.” said Streicher.
Streicher added: “In addition, businesses can expect SMS quality to improve as well.”
He asked the question of how this came to be: “Let’s take a step back to 2012 when Cell C broke the gentlemen’s agreement between the mobile operators that they would not terminate A2P traffic on each other’s networks. This means that for the first time, network operators don’t have a monopoly on the A2P traffic on their networks.”
With regards to competition within the A2P SMS space, Streicher said while the interconnect “pricing regime” is eroding some mobile operator’s profits, it has effectively reduced mobile operator’s A2P SMS wholesale prices, which are offered to Wireless Application Service Providers (WASP).
WASPs now have a choice as to how they send their customers’ messages.
Furthermore, WASPs in turn are able to pass on the savings on the wholesale prices to their customers.
Streicher said BulkSMS.com customers are already experiencing savings of approximately two to six per cent per SMS. Streicher said businesses can expect a higher return on investment (ROI) on their mobile messaging campaigns.
“What’s more, because mobile operators are now competing for your SMS traffic, we’re likely to see an improvement in quality as the SMS channel is beefed up to maintain and grow this – still lucrative for the operators – traffic,” concluded Streicher.
