Evaluating the Impact of Corporate Hubbing on Operators
29 Nov 2018
At Capacity Messaging & SMS World 2018 held in London, GMS’ Chief Strategy Officer, Robert Rose moderated a panel discussion on “Evaluating the impact of Corporate Hubbing on operators” on November 28. Here, he shares some valuable thoughts on the subject and raises some valid questions.
Almost 15 years ago the GSMA “Open Connectivity” initiative validated the evolution of independent messaging hubs that had facilitated the transmission of international P2P SMS messaging but had raised questions about business models. The hubbing approach was also a feature of the roll-out of international MMS. At the same time aggregators developed “gateway” propositions for international A2P SMS traffic. In all cases, the operational rationale was simplification and expediency and over the years the activities of the global messaging hubs took the place of bilateral agreements which addressed only point-to-point transmission – even as P2P SMS service itself suffered incursions from the OTT messaging services.
Now the scenario has evolved. Many MNOs regard messaging service as a legacy and are more focused on other technologies and activities – particularly when economization means they are trying to do more with less. Corporate entities, responsible for several group operating companies, adopt a mission to drive economies of scale through centralization and one of the first areas they tend to look to is Messaging. Furthermore, the corporate hubs are also seeking to centralise and enhance the delivery of A2P SMS monetization solutions received by the individual operating companies. Even while the A2P messaging business is expected to deliver increasing revenue opportunities over the next few years, the fact that OTTs are now developing into A2P (business messaging) too, means that the future for SMS activity for these individual operating companies is less than certain.
Over recent years the response to these circumstances has been the development of corporate messaging hubs, usually for all messaging types - both P2P and A2P. This development poses questions: What challenges exist in setting up a successful corporate hub? Should the focus be on all messaging or just A2P SMS messaging? Will the corporate hubs be more successful in confronting competition from the OTTs? How will these developments affect A2P monetization for operators? Where does all this leave the independent hubs in the future, will they still have a role to play?
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