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SMS firewall & security gateways market set to grow

  • Published 20th January 2014

Recently, Infonetics Research released excerpts from its latest SMS/MMS Security Gateways market report in which it is projecting such products will grow to €51 million ($69 million), an increase of 70 per cent over 2012. One of the key drivers for this growth is the success of Enterprise Application-to-Person (A2P) SMS which includes uses such as Marketing and Customer Relationship Management. Mobile network operators [MNOs] are beginning to see the benefits of firewalling their existing messaging networks using transparent techniques, as it can help protect revenues and improve customer experience.

The most important aspect, from an operator’s perspective is that firewall systems can ensure their subscribers are not subjected to spam messages, which helps improve both customer loyalty and retention.

Unlike emails, the SMS channel is still a highly trusted communications channel with SMS marketing being 99 per cent guaranteed to reach the intended audience.

As the enterprise A2P market grows, the value chain between the enterprise customers wishing to communicate with subscribers and the operator becomes increasingly complex and many operators simply can’t manage every enterprise customer.

MNOs must therefore rely on third party aggregators to manage those relationships.

In order for this to work, operators must open up their interfaces to allow these types of genuine marketing SMS broadcasts to happen over the SMS channel.

However, this also means that the SMS channel is also opened to spam message abuse.

Protecting subscribers from spam

The overall aim of opening up the SMS channel is to facilitate enterprises to access their customers through SMS.

This can include airlines contacting their customers about flights, banks communicating about personal accounts, as well as more general marketing messages.

The power and success of SMS marketing comes from the fact that so little spam is ever received by the subscriber.

It is a trusted channel which operators are very keen to protect.

If spam messages were to mix in with genuine marketing and personal SMS messages the response rates from customers will drop, and the power and impact of legitimate marketing will be drastically reduced.

Whilst overall operators are seeing person-to-person (P2P) SMS revenues decline, enterprise A2P pricing plans have remained relatively stable – something which operators are keen to protect.

Firewall systems can help operators ensure that A2P SMS messages are routed correctly, ensuring that any A2P messages coming through the inter-carrier P2P channel is forced to be redirected on to the A2P channel where it belongs and where there are more favourable revenues to be had.

It’s certainly encouraging to see continued growth in SMS and MMS security gateway and SMS firewalling markets, and is a good indicator that despite a recent drop in P2P SMS messages for the first time, there is still an active and growing A2P market.

As operators continue to see SMS margins shrink, they are constantly looking for ways to both protect their revenues, as well as increase customer loyalty and satisfaction.

Author biog

John Murtagh is currently Chief Technical Officer (CTO) with Anam Technologies. Like many of Ireland’s finest mobile telecoms professional, John started out with SMS expert, Aldiscon – in his case as a systems engineer. He then moved on to Logica Aldiscon after its acquisition eventually ending up as technical  director with LogicaCMG. After this John moved to Anam. John’s watchwords include future-focused and user-friendly demands.
John is a fan of triumphant talent in adversity and is always asks for more from technology.