Alex Duncan, CEO, Openmind Networks
Traditional operator business models have remained the same for many years in Europe: minutes of voice, volume of messages and megabytes of data as a result of smartphone adoption levels.
Faced by an increasing commoditization of these services, as well as tightening EU regulations, operators are now exploring new angles for service innovation to engage subscribers and increase loyalty.
But much of this requires expensive infrastructure investment, with an associated delay in implementation that just won’t fly in the face of competition from swift and nimble OTT players gaining traction in Europe.
According to Ovum, Western Europe will see a CAGR drop of $15.3bn between 2013 and 2019 from the provision of voice and data services to consumer and enterprise end-users.
The truth is operators are at an impasse, and are in need of some cash flow to stem the gap between the declining revenues from traditional voice, message and data services, and the much-heralded but as yet unrealised income from new business models derived from quad-play and content partnerships.
But there is a quick, inexpensive way for operators to build accretive revenue streams that only require the slightest of tweaks to existing infrastructure.
They can act as an enabler for brands and organisations to send push notifications to their customers, by offering both SMS and push notifications as a delivery method for content from partners and other third parties.
Operators can use a cloud-based service that integrates with their existing network infrastructure to take content which is normally sent as SMS and instead deliver the content as a push notification.
This is a simple, inexpensive process that ensures that the operator’s existing A2P infrastructure does not need to be replaced.
All that is required is that the subscriber has the operator’s app on their phone.
Many operators offer their own customer self-care apps – “O2 more” and “My EE” in the UK, for example – that include information regarding customer data usage and account details.
These apps often also offer promotions and discounts from a select number of partner brands within the app via a specific offer portal.
By offering push notification delivery as a service, operators can ensure commercial partners are able to reach the right user at the right time on the right device, without the necessary expenditure and technical know-how of developing a proprietary brand app.
For operators, the opportunity to monetise this additional traffic creates new business models and additional revenues beyond their current SMS delivery role.
Why the push for push?
Users are bombarded every day through multiple channels.
For consumers, this information overload makes it difficult for them to decide what’s relevant and what’s not.
More often than not, it is easier to ignore completely than click, and this is no less true when it comes to push notifications.
But new data from a survey conducted by OnDevice Research of 2,000 European smartphone users across the UK and Germany reveals the powerful potential of push notifications as a tool for user engagement, even above other digital channels.
This research shows that click-through rates for push notifications can be over 40 percent.
Such levels of interaction are almost unheard of for brands and organisations using mobile as a marketing or sales channel.
The huge consumer appetite for push could be extremely valuable to brands and organisations as a means of reaching their customers and driving new revenues.
While many smaller brands and organisations are hampered by a lack of financial and technological resources to capitalise on the potential of push, those that can enable push notification via an operator stand to gain substantial benefits without the need to invest in the development of a proprietary smartphone app, or understand the underlying technology.
A recent Openmind market study with Mobilesquared showed that expansion into push, alongside SMS and data services delivery, will allow operators to continue to monetise A2P SMS, while creating a whole new revenue stream of up to €1.8 billion in Europe by 2018 (and €10.1 billion globally) from the monetisation of this additional traffic.
Operators can maximise existing network infrastructure to create new business models from notifications sent, advanced analytics, and push notification clicks.
The total €1.8 billion opportunity in Europe is made up of two main elements.
First, a simple, inexpensive cloud-based push notification, content management and analytics engine could result in revenues of €700m from push notifications sent by operators in Europe this year alone, growing to €1.1bn by 2018.
Second, enabling business models where operators can charge additional rates for high value “click through” messages might also yield additional revenue of €455m, growing to €728m by 2018 based on a rate of €0.09 per push notification.
Operators already have many of the critical components to enable a push notifications service for brands and organisations: they already have the infrastructure, not to mention the relationships in place with many brands and organisations that use operators to deliver SMS to their customers.
It’s time for operators to sweat their assets the smart way to get the most out of their existing service.