At Mobile World Congress (MWC) in 2015 Mark Zuckerberg gave a keynote speech for the second year in a row and to me it really seemed like keeping your friends close and your enemies closer. After all, WhatsApp and Facebook are responsible for billions of lost dollars in messaging revenue for global wireless carriers.
I couldn’t help but think of this as I met with Acision yesterday. Some years back I was in their corporate offices in Texas where they told me the threat from advertising based tech models to SMS was unsustainable. Basically their argument was that a carrier wouldn’t be able to replace the subscription revenue with ads as the advertising market wasn’t big enough to replace the dollars that came in from sending texts.
This was before app stores – there was no iMessage, WhatsApp, etc. At the time, they had a point.
The app store indeed changed everything and this company relying on SMSC and MMSC sales was facing a situation where their customers were seeing the revenue to fund these purchases eroding.
In response, the company replaced the management team and came up with a dynamic plan to capitalize on their strengths and enter new markets to ensure they respond intelligently to creative destruction brought on by Silicon Valley.
By integrating flexibility to the SMSCs they produce, carriers can now add on modules to their Message Controller or MCO. These modules can help carriers reduce revenue leakage through things like grey root detection which is lost revenue from intercarrier agreements designed to undercut direct carrier billing relationships. They also have spam and fraud fighting solutions which are selling well. Moreover they are helping carriers migrate to an IP world via SMS over IP based SMSCs.
Another area of growth for the company is consumer services – in one case in Mexico, 8.5 billion messages per month are stuck in the system due to lack of credit. By allowing a carrier to turn on collect SMS, the acceptance rate can be between 32-40%…In one case resulting in a quarter of a billion dollars in found revenue. Acision also facilitates SMS gifting as well as SMS-based loans for their carrier customers.
Value added services is a great way to keep carriers sticky while generating more revenue. Carriers can turn on white and black lists and allow the auto forwarding of messages. Another service which is in trials is the blocking of data to phones when a user is driving. Only when the car is stopped and not at a traffic light does the system release the messages. Currently there is a joint pilot of this program between the second largest carrier in the US and an insurance company I am told.
If you have been following TMC’s WebRTC Expo or WebRTC World products, you know the company has become a big player in WebRTC as well. This is part of the company’s Rich Enterprise Services initiative. This initiative also includes the ability to send premium message, secure encrypted texts from point-to-point to ensure the contents aren’t tampered with or monitored.
The company’s purchase of Crocodile is how they got into WebRTC in fact and now the company holds hackathons… The most recent winner of their contest was an app called Yoroshiku which is what J.F. Sullivan CMO & EVP of Products refers to as Tinder meets Rosetta Stone – a service which allows you to connect visually with other people who speak a language you want to learn.
Finally, the company’s fuseMe app allows carriers to take on WhatsApp and others through an solution which is part news delivery service and part collaboration and social tool. It allows multiple people to be on a video calkl but I am told over WiFi, 14 is as many as you want to connect with to keep the quality acceptable.
Operators for their part can get involved with the app/service in exchange for a revenue share agreement on things like in-app and in-game purchases.
Enterprise customers have jumped on the fuseMe app bandwagon as well using it for things like video banking between tellers and customers. It is infinitely flexible based on what I am told.
In short, creative destruction of markets have turned Acision into an innovation machine of sorts, evolving in its core markets and expanding into rapidly growing ones where they can use the technology which competes with them as a Trojan horse to sell more services.