The Month in Telecoms: Feb 2024

This month’s newsletter has a slightly different feel to it as I wanted to share my highlights from Mobile World Congress as well as the usual industry news and views from around the world.

GSMA MWC is the largest and most influential mobile technology conference and this year boasted almost 100,000 visitors. This was also the 10th anniversary of my first visit, and it continues to place itself high on my ‘must attend’ events list.

Close to Home

My show started earlier than usual in Munich airport where I was able to have an impromptu catch up with industry leader Robert Gerstmann of Sinch . Robert is as bullish as ever about the future of messaging and sees a huge opportunity in local markets as we see a decline in usage from international brands. That opinion is reflected by Sinch’s recent acquisition strategy across different regions.

There is certainly a revolution in the messaging business as the traditional SMS use cases of authentication, marketing and notification are being transformed into higher value services on a variety of rich channels.

Last year, Mobilesquared Ltd shared the fact that less than 10% of businesses currently use CPaaS products. As services become more effective and easier to use, we will see a significant increase in the number of businesses using messaging or authentication services. Despite the pessimism around the state of the international messaging business (and especially SMS) there is a huge opportunity sitting in domestic markets.

Number Validity

I was invited by the Mobile Ecosystem Forum and netnumber to join a panel session on Number Validity and routing. I was joined by number data guru Catalin Badea who shared his view on how Home Location Register (HLR) and other data points can help improve both quality and security. The recent rise in fraud in the SMS industry has meant verifying numbers before sending a message is more and more important.

It is no longer enough to simply resolve number portability for routing. Now we need high quality live information about numbers to ensure safe and cost-effective routing. Katia Gonzalez shared her knowledge from the fraud prevention perspective and T?nis Kirsipuu talked about the impact number verification can have on services offered to SMBs.

Outside of the panel session, the popularity of routing based on detailed HLR information is clear in the SMS industry as cost of termination has skyrocketed. Businesses should not pay for messages that do not reach the end user.

CEO of HLR Lookup David Morris has been a market leader for years and they have seen a big increase in data usage as SMS aggregators see more and more value. Pricing is still a tricky topic as there is an assumed low cost per transaction but a high maintenance cost for managing the interconnections and availability. The future is pricing based on value of the service not cost. If a customer is able to identify a number in Indonesia is not available, they could save twenty cents or more on the cost of an attempted message. There must be a billing model that can better reflect the high value this service offers.

Beyond SMS?

From the enterprise perspective SMS is not enough. A few years ago there were many businesses purely focused on the A2P SMS market and providing connectivity for businesses around the world.??

This clearly does not cut it anymore. Customers expect a full range of products from a vendor. Messaging (omnichannel not just SMS), cloud numbers, voice, mobile identity and more needs to be in your portfolio for big business to take the offering seriously.

Enterprise is moving away from the massive multi-vendor model to focus on working with one stop shops. They want to leverage on connectivity across products not just cherry-picking single areas of expertise.

Mobile ID

Mobile Identity is probably this years’ MWC Buzzword and is clearly a growing area when we look at the increasing cost and lack of reliability in existing verification products (think One Time Password over SMS).

The idea of replacing OTP with an alternative form of authentication has been a discussion point for years amongst hyperscalers and telcos alike. The tech giants have been searching for a more effective and lower cost alternative forever and finally it looks like the telcos are willing and able to play ball.

Vodafone have been one of the pioneers in offering verification services. I was lucky enough to get a masterclass on the Vodafone Identity Hub from Sarah Pennell during the show. I was impressed with the functionality and practicality of the API offering. The potential for reducing friction and improving safety online is huge. Even though it is a relatively new product, uptake in usage will be rapid as businesses discover the huge advantages of silent verification both commercially and technically. ?

Sticking to the Mobile ID theme, TMT ID used MWC as a soft launch of their new branding as TMT ID. A clear indicator of where John Wilkinson and the team see the future of the verification business.

Bird is the word

The one story that has dominated the headlines for the last month has been the rebrand of Message Bird to Bird and some rather thought-provoking statements from CEO Robert Vis .

Vis is well known for being an outspoken disruptor in the CPaaS market and even back in the Mobile Tulip days, Bird was seen as the figurehead of the European market (the nickname of the European Twilio was meant as a compliment at the time).

The main talking point is around SMS pricing models which is highlighted here in the blog below:

This clear attempt to shake up competitors and change the way the enterprise messaging business comes as a breath of fresh air. The reality is that pricing is still determined by the mobile operators (in the end they ‘own’ the subscriber) and the mini-monopolies of supply continue to exist. There is not much the CPaaS players can do to control the cost of termination. I guess cutting margins to zero is one approach, but I am not sure if that is the solution to a sustainable messaging business.

On this topic make sure you also check out Sinch’s response to the comments here. Both sides are correct. Mobile Operators set the base cost and CPaaS players need to make margin. It is pretty straight forward.

Also make sure you watch the special episode of the Truth in Telecoms with everyones favourite Alan Quayle and Giovanni Tarone on Youtube.

The key to success is to offer higher value features rather than being a straight forward API access partner. Customers expect higher level support and the value is not in the channel itself but the usage of the channel. The margin for CPaaS players sits a layer above connectivity.

MEF board elections

During the Mobile Ecosystem Forum event last week in Barcelona, they announced the newly elected board members. This is voted for by members. ??

Anurag Aggarwal wins back a seat in his new role at GMS , industry stalwart Robert Gerstmann holds his spot, Vodafones Amira Akra, PMP??? is added to the board bringing a wealth of product experience and a special mention to Dr. Marco Lafrentz , VP at NetNumber who gets himself a seat after two attempts.

Movers and Shakers

英国电信集团 have appointed the experienced Allison Kirkby as CEO after spending nearly 4 years as CEO of Telia in Sweden.

Raj Dass is now the Chief Commercial Officer for Infinity in London.

Rising star Ignacio Baringo Gracia has joined the operations team at Vonage .

Fadi Hammad rejoins Broadnet Technologies as Senior Account Manager

Industry legend Anurag Aggarwal takes on the CRO Enterprise Business role at GMS .

Security specialist Alan Murphy joins VOX SOLUTIONS as VP Engineering after spending many years in the network firewall space.

Popular Diego Pinto is now the commercial VP at QGlobal SMS .

James O'Hare joins Sitoo as the UK Managing Director following his role with Link Mobility.