Anyone in the business of enterprise messaging should be interested in Latin America. The numbers tell us why. LATAM is a youthful, fast growing continent with a passion for mobile. According to the GSMA, there were 500 million smartphone connections at the end of 2021 – an adoption rate of 74 percent. It reckons the next four years will add almost 100 million more.
As this smartphone population grows, so will mobile internet adoption. GSMA estimates almost 70 percent of connections will be 4G by 2025. Meanwhile, 12 percent will be 5G, which will equate to 86 million connections. GSMA believes this connectivity will contribute more than $30 billion to the continental economy.
What does this mean for the A2P messaging space?
Well, it very much depends on whether enterprises embrace the opportunity. According to Mobile Ecosystem Forum and Mobilesquared, A2P SMS revenues for the region are booming. They could reach $1.17 billion by 2025, compared to $723 million in 2020.
But there’s still loads of room for improvement. Mobilesquared says just 3.1 percent of LATAM brands used A2P SMS in 2020. Clearly, educating enterprises about the benefits of A2P SMS and rich messaging should be a priority for aggregators and MNOs.
Bringing the LATAM A2P community together
MEF is certainly playing its part. The trade body (of which GTC is a member) hosted its first MEF CONNECTS LATAM event in 2021. That was online-only thanks to the pandemic. But it was so successful that MEF reprised it with a live in-person 2022 edition that took place in São Paulo in August.
MEF CONNECTS LATAM 2022 featured talks in both Portuguese and English. Sessions focused on new developments in payments, personal data, cloud gaming and – of course- enterprise communications.
It was a thought provoking event featuring many insightful speakers. GTC was there. And here are our eight big takeaways…
1. The best way to understand A2P RCS? Do it yourself
The best way to sell any product is to truly believe in it yourself. This seems to be a lesson that LATAM operators are learning about RCS. On stage Gabriel Portugal, Head of Advertising at Claro Brazil, described how the MNO had shifted its RCS focus, at least for now, to internal use cases.
He said that in-house teams are now much more familiar with the channel. They are building operational experience with RCS campaigns. And this is generating success stories they can use to demonstrate to brands how to get the best from RCS.
2. A ‘basic’ entry-level RCS tariff could boost adoption
The issue of how to price RCS has never been resolved. Should it be priced per message or per session? Should it only be for outgoing messages? These questions will continue to be debated. But maybe simplicity is a good place to start while the industry is still embryonic.
Leonardo Kenji, heading up RCS within Vivo Brazil’s B2B team, thinks so. He revealed that Vivo will be launching a basic RCS message tariff to match the current price for A2P SMS. The tactic went down well with audience members. They seemed optimistic that this will offer an easy, first step into rich messaging for brands by removing the premium price barrier to entry.
3. 5G spectrum is no longer just for the highest bidder
It’s understandable that governments run simple ‘highest bidder’ auctions for the new mobile spectrum. Who can blame them for wanting to maximise revenue? But the signs are that some are now looking at the process more holistically.
Ari Lopes Senior Research Manager for Americas at Omdia, shared how the bid process for 5G spectrum in Brazil (which represents half of LATAM’s 5G coverage) had changed. In short, regulators are prioritising bids that promise social and economic benefits. These include extending 5G coverage to federal roads, public schools and cities currently lacking 4G.
4. Google Ads and RCS… teaming up to start customer conversations?
In Q4 2021, Google/Alphabet’s advertising revenue hit $61 billion. This is a giant world-conquering business. So imagine clicking on a Google Ad and seeing a call-to-action based around RCS. What an impact that could have.
Well, it might soon be here. At the event, Kaio Marin, Market Lead for Google Business Messages, hinted that Google Ads will soon let brands initiate conversations through RCS. He stressed the importance of a welcome message for when users first arrive in an RCS window – and suggested that this could boost conversion from the get-go.
5. Google Business Messages and RCS belong together
While Google is deeply committed to RCS, we should not forget that it has other enterprise messaging products. Not least Google Business Messages. GBM lets consumers message brands from sources such as the Search box, Maps and mobile websites. These destinations are internet-based and independent of MNOs/MSISDNs.
During the MEF event, many speakers reminded the audience that GBM and RCS are highly complementary. Why? Because GBM helps customers reach out to brands while RCS also works the other way – letting brands strike up conversations with customers.
6. The accolade Brazil doesn’t want: it’s number one for fraud
A2P fraud and malpractice are always with us. We have written about this many times. Sadly, Brazil seems to be the fraud hotspot in 2022. Rafael Pellon, board member at MEF, shared that Brazil has recently overtaken Mexico as the main focus for fraudsters.
On a more positive note, plenty of speakers spoke of the fightback.
The US Campaign Registry showed how registering brands and their campaigns can reduce spam and smishing. Infobip revealed that it is working with Claro to devise new authentication methods via mobile identity solutions. And XConnect shared how it can identify numbers hijacked for artificial traffic inflation and premium rate abuses.
7. Flash calling – time for MNOs to make a decision
Flash calling presents a big dilemma for MNOs. It offers a cheaper way for brands to authenticate customers. But it can obviously cannibalise SMS passcode revenues. So do MNOs fight it, ignore it or monetise it?
On stage Juan Felipe Santos Segura, VP of Strategic Partnerships (LATAM) for VOX Solutions, explored the three options available to MNOs. It’s obvious where VOX stands. It is (arguably) the industry’s most vocal proponent of flash calling. As such, Juan mentioned it already has 20 flash monetisation agreements in place with MNOs.
8. Mobile numbering data needs librarians
When you are a major enterprise sending texts to millions of customers all over the world, you better make sure the numbers are right. But how is this possible when people switch networks and make other changes all the time?
Mobile numbering data really matters. Especially in a fast-moving market such as LATAM where the mobile number is widely used as universal source of ID.
At the MEF event, XConnect presented itself as the librarian of this space. It says its systems analyse numbers from multiple sources to pick up 3 million changes a day in order to answer two simple questions:
· Does the phone number exist?
· Does this person have the rights to use it?
XConnect says accurate number data can reduce fraud and have a big commercial payoff, allowing a messaging player to route its messages correctly every time.
GTC employs a small team of specialists in the LATAM region, with extensive local knowledge, contacts and native language skills. Our experts can advise on all aspects of the A2P voice and messaging space as well as anti-fraud and flash calling. So contact us!
Global Telco Consult (GTC) is a trusted independent business messaging consultancy with deep domain knowledge in application-to-person (A2P) services. GTC provides tailor-made messaging strategies to enterprises, messaging service providers, operators and voice carriers. We have expertise in multiple messaging channels such as RCS, Viber, WhatsApp, Telegram and SMS for the wholesale and retail industry.
GTC supports its customers from market strategy through service launch, running the operations and supporting sales and procurement. The company started in 2016 with a mission to guide operators and telcos to embrace new and exciting opportunities and make the most out of business messaging. For more information or industry insights, browse through our blog page or follow us on LinkedIn.