Acision Seizing the Opportunity in Messaging - US Consumer Research May 2012

Seizing the Opportunity
in Messaging
US Consumer Research on Messaging Habits
in the Smartphone Era
May 2012

Seizing the Opportunity in Messaging
US Consumer Research on messaging habits in the Smartphone era

1. Introduction: Acision’s Consumer Research on Messaging .......................................... 2

2. Messaging Realities ................................................................................................... 2

3. Messaging in the Smartphone Era .............................................................................. 3

4. US Consumer Research on Messaging Habits ............................................................. 4

Characteristics of consumers likely to use SMS alternatives .......................................................... 4

SMS vs. OTT app uptake and usage ................................................................................................ 5

SMS vs. OTT app user experience ................................................................................................... 6

The value of SMS in US consumer’s every day life ......................................................................... 8

Seizing the opportunity in Smartphone messaging ........................................................................ 8

Seizing the opportunity in SMS messaging ..................................................................................... 9

5. Conclusions and Recommendations for Operators ................................................... 10

Conclusions ................................................................................................................................... 10

Recommendations for operators.................................................................................................. 10

6. About Acision .......................................................................................................... 11

1


1. Introduction: Acision’s Consumer Research on Messaging
In January 2012, Acision commissioned independent research agency Vanson Bourne to undertake a
detailed survey in the US and the UK to understand the consumer habits of, and usage patterns in
messaging. The research covered all aspects associated to messaging today, including the devices,
type of subscription, messaging services, usage, user experience and preferences. The research was
conducted using a panel based methodology, using a representative sample of 1000 consumers per
market, aged 18 years and up.
Motivation for this research was to understand the usage of SMS messaging versus SMS alternatives
like iMessage, WhatsApp and Facebook, particularly in light of continuous media hype around the
impact of these alternatives on operator SMS traffic and revenues. Acision also wanted to assess and
understand the consumer drivers behind alternative messaging services. The objective is to provide
operators with guidance on how to deal with messaging in a Smartphone dominated world and secure
SMS revenues now and in the future.
This research paper applies the following structure: Chapter 2. examines the messaging realities by
presenting analyst data and predictions on SMS usage, SMS alternatives usage and operator
revenues. Chapter 3. provides a theoretical framework on messaging in the Smartphone era,
including a high level view of what drives the uptake of different messaging services. Chapter 4.
presents a deep dive into the US consumer research, detailing the consumer data on uptake, usage
and user experience, as well as defining the opportunities in messaging for operators. Finally, chapter
6 summarises the conclusions of the research and provides recommendations for operators.

2. Messaging Realities
Over the past year, the media has been flooded with articles about how SMS revenues are being
impacted by its OTT (over the top) counterparts. Many times, these articles are accompanied by very
strong and unambiguous one liners heralding the
death of SMS (picture on the right). Even though it is
without a doubt that SMS alternatives can count on
increasing popularity, the conclusion that they are
actually ‘killing’ SMS is premature. It is
understandable of course that a 20 year established
power house like SMS is a well suited target for a
media bonanza, however this has to be taken lightly
because if you put it into perspective, it has been
and still is the single most successful and profitable
data service for operators around globe today.
Person to person (P2P) SMS or text messaging
represents a $100+ billion operator revenue stream
1
and will continue to grow for years to come . The
number of SMS users will grow from around 7 billion in 2011 to over 10 billion in 2016, generating
over $120 billion in operator revenues. SMS traffic shows an ever bigger growth, from 5.9 trillion
messages in 2011 to 9.4 trillion in 2016.
However, this doesn’t mean that the recent media hype is based on fiction. Take WhatsApp for
example, this Smartphone OTT app is platform independent and available for iPhone, Android,
Symbian, Windows and Blackberry. It is the top-selling iPhone app in 61 countries and among the top
2
10 highest revenue-grossing iPhone apps in 47 countries . A recently published report from Informa
predicts that the number of mobile instant messaging users will grow from around 1 billion in 2011 to
almost 4 billion in 2016, with consumer spend growing from over $5 billion in 2011 to over $15 billion
in 2016. Traffic is expected to grow from around 1.5 trillion messages in 2011 to over 7 trillion
messages in 2016. While these OTT messaging services will continue to grow in popularity, they still
have a long way to go to catch up with the revenues generation from SMS.

1
Informa March 2012, Portio Research February 2012
2
Financial Times, November 2011

2


Taking the analyst viewpoints into consideration, these are the messaging realities:
SMS remains a key driver of operator revenues and profitability for years to come;
Pressure on SMS traffic and revenues might be a reality in some markets, but not to the extent
as implicated by some of the media;
SMS remains the only unambiguous and dominant messaging service available for all mobile
phones globally, with 2.5 times the reach of the OTT apps in 2016;
Both SMS and OTT apps show significant growth in users, usage and revenues, indicating that
OTT apps provide an alternative for, as well as an additional service next to SMS, not a pure
substitute.
SMS unmatched reach provides opportunities for additional traffic and revenue growth through
enterprise services and enhanced services
The next chapter provides a theoretical framework on messaging in the Smartphone era including a
high level view of what drives the uptake of different messaging services.

3. Messaging in the Smartphone Era
The SMS service is still fundamentally the same service today as when it was introduced 20 years
ago and more popular than ever. This popularity is based on five key fundamentals:
Reach: SMS is available on virtually any handset and can be used across operator networks
globally. It has unparalleled connectivity;
Reliability: SMS has unmatched service uptime and delivery success rates;
3
Speed: SMS delivery is instant and 90% of SMS messages are read within 3 minutes
4
Open rate: 98% of SMS messages are opened
Ease of use: SMS messages can be composed and replied to in seconds
Even with a track record of 20 years, there is one major development responsible for compromising
the untouchable status of SMS: Smartphone adoption. This has created the opportunity for practically
anyone to design and market messaging apps targeted at Smartphone owners. Even though these
services lack the reach and reliability of SMS, they compensate this with an enhanced user
experience, offering new messaging features like
delivery notification, content sharing, see a response
written, status updates and so on. But most
important, these services are virtually free of charge
– if not on a free WiFi network, all the consumer has
to pay for is their mobile broadband package to
utilise these services. For some operators, like in
Taiwan, the Netherlands and Saudi Arabia, the
popularity of SMS alternatives have come as a
surprise and they are now facing pressures on their
SMS traffic and revenues. This becomes clear when
taken a closer look at the Smartphone adoption
cycle (graph on the right).
Critical mass of Smartphone penetration is the prerequisite for alternative to SMS
Where feature phone owners can only use the SMS service, Smartphone owners can connect
to the internet via mobile networks or WiFi and download SMS alternatives. Once critical mass
of Smartphone penetration is reached, OTT app communities provide sufficient reach to
become a viable alternative for SMS.

3
Mashable, 2010
4
Frost & Sullivan, 2010

3


Pricing is the trigger
Without any competing service, pricing of SMS has seen little or modest erosion over the past
20 years. Even today, out of bundle prices for SMS can easily exceed $0.10 to $0.20 per
message. Unless Smartphone owners are on unlimited bundles, they have a very strong cost
incentive to look for alternatives, especially when sending media files such as photos, and they
are willing to compromise on the reliability of the service. If operators hold on to their traditional
pricing models, SMS traffic and revenues will be seriously impacted.
Enhanced messaging features will be the next battleground
Where the major driver for OTT messaging adoption is price, they also provide an enhanced
user experience with all types messaging features. There is a great opportunity for operators to
introduce a service on top of SMS that matches or exceeds the user experience offered by the
OTT apps today and leverages SMS reach and reliability. If operators fail to launch enhanced
services that can compete with the OTT applications today, P2P SMS traffic and revenues will
come under increasing pressure as Smartphone adaption increases. Even though operators are
planning to launch RCS, a mobile enhanced messaging services that offers features like instant
messaging, video sharing and buddy lists, they cannot ignore the urgency as the alternative
services mature and Smartphone adoption increases – in some countries this already exceeds
the critical mass of 20%.
The next chapter presents a deep dive into the US consumer research, adding consumer insight to
the generic market data and theoretical framework outlined in the previous two chapters.

4. US Consumer Research on Messaging Habits
In January 2012, Acision commissioned independent research agency Vanson Bourne to undertake a
detailed survey in the US to understand the consumer perception of and usage patterns in
messaging. The research was conducted using a panel based methodology of 1000 consumers, aged
18 years and up and split in 4 age groups of 250 respondents (see graph below). The research
showed that Smartphone ARPU significantly outweighs feature phone ARPU and that Smartphone
users also represent the most excessive messaging users. The research therefore focuses on the
Smartphone segment, which is represented by 612 respondents.
Acision has chosen to investigate the US as this is the most developed country in terms of
Smartphone uptake and high speed network deployments like LTE. This chapter takes a closer look
at the consumer characteristics that are likely to use SMS alternatives, uptake, usage and user
experience of SMS vs. OTT apps, the role of SMS in consumers’ every day life and how operators
can seize the opportunity in Smartphone messaging and SMS.

Characteristics of consumers likely to use SMS alternatives
The first step of the research consisted of identifying which part of the subscriber base has access to
the SMS alternatives and is likely to use them.
Smartphone owners. As indicated in the
previous chapter, Smartphone ownership is a
prerequisite of usage of SMS alternatives. In
our research, 61% of respondents own a
Smartphone, with the majority of owners aged
between18-34. But penetration is also well
above 50% in the 35-54 age category (graph
on the right).
Mobile internet subscription. It might be
expected that a mobile internet subscription is
required to gain access to the OTT apps but
with WiFi access widely available, 19% of US
Smartphone owners stated that they are not subscribed to a mobile internet service. This
segment of Smartphone owners does not have 24x7 access to the OTT apps, which means that
when they are not on a WiFi connection they only have access to the SMS service.

4


Pricing models. The US was one of the first to introduce unlimited SMS packages. On average
62% of US Smartphone owners questioned have unlimited SMS pricing packages. Even though
this takes away the cost incentive for the majority of the subscriber base to use SMS
alternatives, this also means that 38% have a cost incentive to look for alternatives to save on
their SMS bundle. Users at high risk of moving to SMS alternatives are the 24% of US
Smartphone users that stated they have
purchased additional SMS bundles, as well as
the 5% of Smartphone owners that state they
are using SMS alternatives to prevent
purchasing additional bundles. Looking in
more detail at the age groups (graph on the
right), there is a clear correlation between
penetration of unlimited SMS bundles and
age, with 74% in the age category 18-25
subscribed to unlimited SMS bundles. At 42%,
the penetration of unlimited SMS within the
55+ age group is relatively low for the US, but
still significantly higher compared to the rest of
the world.

THE PRIMARY INCENTIVE TO USE SMS ALTERNATIVES, COST, IS LIMITED IN THE US
The majority of US consumers have access to OTT apps, with around 3 out of 4 consumers
within the age groups 18-25 and 26-34 owning a Smartphone. This high penetration of
Smartphones would have a major impact on SMS traffic and revenues if combined with restricted
SMS bundles. US operators have acted appropriately as the majority of US Smartphone owners
are subscribed to unlimited SMS bundles, eliminating the cost incentive for using alternatives.

SMS vs. OTT app uptake and usage
US consumers have little cost incentive to use alternative messaging services due to the high uptake
of unlimited SMS bundles. This paragraph provides more insight on how this affects the actual uptake
and usage of SMS versus OTT apps.
Before going into more detail, a closer look at the different types of OTT apps is required. First there
are the social media / traditional desktop apps that have extended to the Smartphone, like Facebook,
Skype and Twitter. A main characteristic is that these apps use names and
aliases and are not linked to the user’s phonebook. In addition to these,
there are OTT apps specifically designed for Smartphones and that mimic
the traditional SMS service, like iMessage, Blackberry Messenger and
WhatsApp.
Looking at OTT app uptake, over half of US Smartphone owners state they
are using SMS alternatives to send messages (pie chart on the left). Uptake
is especially high at 70% amongst the 18-25 age group and at 59% amongst
26-34 age group, indicating they are especially popular with the younger
population of US Smartphone owners, who build communities with friends.

5


SMS vs. OTT app uptake. The graph below not only shows the high uptake of SMS and MMS
despite the availability of OTT alternatives, but also demonstrates that the market for OTT apps
is highly fragmented, consisting of a variety of relatively small, closed communities. OTT app
uptake in the US is driven by social media, with Facebook penetration peaking at 48% for the
ages 18-25 and at 44% for 26-34. Smartphone OTT app uptake is driven by device specific
apps (iPhone and Blackberry), which are
restricted in nature to the number of devices
they are able to sell. WhatsApp has, as the
only platform independent solution in this
research, an uptake of only 5%.
SMS on the other hand is actively used by
91% of US Smartphone owners. This is
almost 2.5x the reach of Facebook, by far the
most popular of the social media / traditional
desktop apps and over 8x the reach of
iMessage, the most popular Smartphone OTT
app. Also MMS has significant higher reach,
with over 1.7x the reach of Facebook and
almost 5.6x the reach of iMessage.
SMS vs. OTT app usage. Next to service uptake, the actual usage of the service is another key
performance indicator when comparing messaging services. With 107 messages, SMS scores
significantly higher on average messages sent per week compared to any of the alternatives.
The most populare Smartphone OTT app
iMessage generates 78 messages per week
and the most popular social media /
traditional desktop app Facebook generates
67 messages (graph on the left). Looking at
the age categories, respondents aged 18-25
sent, by far, the most messages per week,
averaging 809 across all channels, with SMS
(176) and Blackberry (165) being most used
service. Respondents aged 26-34 sent 519
messages per week, with SMS (103) and
iMessage (83) most used. Respondents
aged 35-54 (243) and 55+ (152) sent
significantly less messages.

THE PRESENCE OF OTT APPS FUELS OVERALL MESSAGING TRAFFIC
Interesting enough, the data shows that OTT app uptake and usage actually is fuelling
messaging traffic and does not, as often implied in the media, function as a pure substitute for
SMS. This goes especially for the traditional desktop / social media apps where of the 55% that
use SMS alternatives, two thirds are using Facebook. This shows that consumers use multiple
messaging channels simultaneously based on the type of message they want to send and to
what audience. The data also shows that SMS remains dominant, both in reach and usage.

SMS vs. OTT app user experience
As SMS and OTT apps are different in the features they offer, the research investigated how this
influences the user experience. Respondents were asked why they are using SMS instead of the OTT
apps and OTT apps instead of SMS. Also respondents were asked how they rate the core service
performance in terms of reliability and speed.

6


Reasons to use SMS instead of OTT apps. According to the graph below, the most important
reason for consumers to use SMS is they are assured the message will arrive in secs (47%).
Reach is the second reason (43%) as SMS is
available on every phone and Reliability the
third (38%). Price is number four (31%), which
indicates that users with unlimited SMS
bundles do not see price as an inhibiting factor
and are probably reluctant to address their
mobile internet bundle by using OTT apps.
Fifth is send to group (29%), which is also
related to the unparalleled reach of SMS. This
shows that besides cost, all the key drivers to
use SMS are related to the core service KPI’s
speed, reach and reliability.
Reasons to use OTT apps instead of SMS. As the graph below shows, the main reason to
use OTT apps is the ability to share content (28%), with social media apps designed to share
content with the user’s community, while the Smartphone OTT apps are designed to share
content with specific users. Second and third are the instant characteristic of OTT app
messaging (27%) and the ability to use the app across devices, so Smartphone, Tablet and
Laptop (25%). The fourth, no phone number
available (23%), specifically refers to the
social media OTT apps, where there is no
link between a contact and the user’s phone
book. The fifth reason is the ability to share
the user’s status or mood (21%). With the
key trigger for OTT app usage, cost, being
eliminated by US operators through unlimited
SMS bundles, there is a clear view on the
secondary drivers for OTT app uptake and
usage, which can all be classified as
enhanced messaging features.
Service reliability and speed. When asked about reliability of the service, almost half of the
respondents state SMS is more reliable, against 7% stating OTT is more reliable (graph below).
Of the most excessive messaging users, aged
18-25, even 60% rate SMS as more reliable.
This probably has to do with the fact that
mobile internet connections are less stable and
reliable compared to SMS connections and
service interuption can occur anytime. When
asked about the speed of the service, 40%
state SMS is faster, against 12% stating OTT
is faster. Further analysis shows that 33% of
respondents find ‘SMS is the most reliable and
fastest’ against 4% finding ‘OTT is the most
reliable and fastest’.

CORE SERVICE PERFORMANCE REPRESENTS THE HIGHEST CONSUMER VALUE
Both services have their own specific competitive advantage. Smartphone OTT apps offer
enhanced messaging features, while SMS offers unmatched core service performance in speed,
reach and reliability. There’s a significant difference in value that consumers attribute to them.
The most important reason to use OTT apps, content sharing, shows 28% support. Significantly
lower than the most important reason to use SMS, arrive in secs, which shows 47% support.

7


The value of SMS in US consumer’s every day life
When asked about the importance of SMS, 65% of US Smartphone owners state they cannot do
without SMS, with almost half of them (45%) stating they’d be lost without SMS. Most encouraging is
that the biggest users of OTT apps, aged between
18 and 34, are also the ones that show the highest
dependency on SMS (graph on the right). Together
with the data on OTT app uptake and usage it shows
that SMS and OTT apps can live harmoniously
together, with SMS remaining to be the preferred
messaging channel for consumers. It needs to be
noted that this situation can only be preserved if
market conditions remain the same and therefore
OTT apps lack reach, reliability and speed. This can
change with the deployment of LTE networks and
competition will shift from core service performance
to enhanced features.

HIGH SMS DEPENDENCY TODAY PROVIDES NO GUARANTEES FOR THE FUTURE
The research data indicates that the next battleground of competition will take place on
enhanced features. Are operators able to launch enhanced messaging features and eliminate
the smartphone OTT app competitive advantage? Or are the smartphone OTT apps able to
improve the core service performance and increase their reach and reliability? It is without a
doubt that the operators are the ones with the most to loose. They run a multi billion dollar and
highly profitable business, so if they are not able to successfully launch a service that can
compete with the smartphone OTT enhanced features, part of their SMS business will be at risk.
On the positive side, SMS will remain the primary service for years to come as there will not be
a service that can challenge the reach and reliability of SMS.

Seizing the opportunity in Smartphone messaging
As concluded in the previous paragraph, it is key for operators to launch enhanced messaging
features that can compete with the smartphone OTT apps. When asked
about the attractiveness of an operator service that includes the capabilities
of SMS / MMS / IM / file transfer / group chat and video sharing, over half
the consumers (52%) stated they will certainly or likely use this operator
service (pie chart on the left). Encouraging is that only 5% of US
Smartphone owners stated not being interested in such a service. When
taking a closer look at the age categories, it shows that especially
consumers aged between 18-34 are highly interested in these type of
service (60%), which is encouraging as they also represent the most
excessive users of OTT apps.
When asked about what such a service should look like, the provided top six service requirements are
all related to cost and core service performance and not to the enhanced features itself (graph on the
right). As explained in chapter 3, pricing is the trigger
for OTT app uptake as consumers start looking for
alternatives to save on SMS expenses. This is clearly
reflected in the new service requirements, with cost
related elements stated as number one, two and
four, namely a lower price compared to the existing
service (63%), included in package (57%) and the
service price (47%). The other three reasons
complementing the top six are all elements related to
the core service performance and that build on the
competitive strengths of SMS over the OTT apps,
namely reliability (50%), instant delivery (45%) and
reach all (42%).

8


Even though core service performance is valued as most important by consumers when selecting a
new service, there is a clear demand for enhanced messaging features (graph below). Most popular
would be a service that can be used across
different devices (35%) and allows consumers to
share content (32%). Other specific Smartphone
OTT app like features ‘See a reply written’ and
‘Message string’ are stated as a key requirement by
almost a quarter of the respondents (24%). Group
chat and share status are named as enhanced
feature number 5 and 6 by respectively 18% and
14% of consumers. The most prominent in this list
of service requirements is the relatively high
demand for content sharing, which indicates that
operators are not fully utilizing the potential of
MMS. This can provide a quick win for operators if
they improve the reach, package it differently with
unlimited bundles and invest marketing dollars to
improve consumer perception and stimulate usage.

THERE’S HIGH CONSUMER DEMAND FOR AN OPERATOR LIKE OTT SERVICE
The research confirms high consumer demand for a service that leverages SMS core service
performance strengths reliability, speed and reach and provides the OTT app enhanced
features. This is not a revolutionary idea, especially in the light of the planned launch of RCS.
There exists the impression that such a type of operator service will replace SMS but this not
feasible as RCS will not be able to match the reach of SMS, at least for many years to come. So
it needs to be emphasized that such a service has to be provided on top of SMS and that native
SMS continuity needs to be secured, also in full IP networks like LTE. If not, one of the key
fundamentals of SMS success, reach, will be lost.

Seizing the opportunity in SMS messaging
Even with a track record of 20 years, the SMS service is fundamentally the same service as it was
when introduced. As this is quite unique for a consumer service in a technology driven market, the
research polled consumers if they are interested in features that enrich the SMS service. Based on a
five point scale, 1 being not attractive and 5 being
very attractive, consumers provided the following top
5: Notifications are valued as most attractive (3.6),
followed by Black/White listing and Message search
(3.5). Group messaging is also perceived as an
attractive service, with group one-to-many and group
many-to-many both valued at 3.4. This shows clear
demand for services that enrich the SMS experience
and facilitates group messaging with different
communities or friends. The demand is further
validated by the fact that 28% of US Smartphone
owners are willing to pay a small fee for these type of
services. So even in a cost centric world, there exist
consumer segments that are willing to pay for an
enhanced user experience.

THERE’S HIGH CONSUMER DEMAND FOR ENHANCED SMS FEATURES
The research confirms high consumer demand for enhanced features on the SMS service. Even
though many have been available for years, few of them have actually been implemented. This is
partly due to the high cost and complexity of deploying such a service, making it hard to create a
positive business case as these services address relatively small market segments. With cloud
delivery models maturing, these types of features can be launched without complex deployments
using shared revenue models, eliminating risk for operators.

9


5. Conclusions and Recommendations for Operators
With any new service challenging the establishment, the popularity of OTT apps has been a common
topic in the media, with many predicting the ‘death’ of SMS. Even though the research shows that this
‘death’ is highly exaggerated, it is well documented that some operators around the globe are feeling
pressure from these OTT apps. So where the media draw conclusions based on OTT app uptake and
the revenue warnings from a handful of operators, this research also analyses the actual uptake,
usage and experience of consumers. By combining both, Acision is able to provide clear guidance on
how operators can successfully compete and co-exist with the OTT apps.

Conclusions
The Acision consumer research combined with market analysis has led to the following 6 conclusions:
1. Critical mass of Smartphone penetration is the key pre-requisite for OTT adoption, not
mobile internet penetration. As 1 in 5 Smartphone owners do not have a mobile internet
subscription, there are many consumers that only have access to the OTT apps via WiFi.
2. Price is the key consumer requirement that determines choice of messaging channel.
Consumers will always look for the lowest price per message when they can choose from
alternative services.
3. Core service performance is the most important driver to use a messaging service and is
the key consumer driver to use SMS instead of
the OTT apps. The latter services represent
fragmented communities with restricted reach
and best effort delivery via less stable mobile
internet connections. Currently, they are not able
to match SMS’ core service performance
strengths in reach, reliability & speed.
4. Enhanced messaging features are the most
important drivers to use SMS alternatives.
Consumers are clearly looking for an enhanced
user experience in messaging. Content sharing
and cross device availability are named as key
drivers to use OTT apps instead of SMS.
5. SMS and OTT apps can co-exist as consumers use multiple messaging channels depending on
the type of message they want sent and with what audience. Also, the popularity of the OTT apps
is fuelling the number of messages consumers send, especially within the 18-25 and 26-34 age
groups.
6. Enriched messaging features are the next competitive battleground. It is contradiction, but
operators are spending billions of dollars that actually improve the lagging core service
performance of OTT apps. By subsidising / stimulating Smartphone sales (reach) and deploying
next gen / LTE networks (reliability), they are reducing SMS’ key competitive edge. So operators
should look to compete on enhanced features, the OTT apps current competitive edge.

Recommendations for operators
Based on the research and Acision’s experience as the global market leader in messaging, Acision
has developed the following 6 recommendations for operators:
1. Eliminate the cost incentive for Smartphone owners to use alternative messaging services.
By offering unlimited SMS and MMS with mobile internet subscriptions, the US market has shown
that OTT app impact on SMS uptake and traffic can be contained.
2. Launch an enriched messaging service. Many operators may look at RCS as the Holy Grail of
an enriched messaging service, but in many markets it will take years before all operators launch
RCS and adoption of RCS enabled handsets has reached critical mass. In the meantime,
operators can partner with the Smartphone OTT apps. By offering an integrated messaging
service that combines best of both worlds operators can profit from the increase in messaging
usage and, most important, understand what drives consumer messaging behaviour and needs.

10


3. Utilize the full potential of MMS. With content sharing stated as the most important feature that
drives OTT app usage, optimising MMS utilisation should be a key operator objective. MMS
network infrastructure is readily available, but still lacks in reach and the positive consumer
perception required to drive traffic growth.
4. Secure native SMS in LTE. The reason is straightforward as there will not be any messaging
service available that comes close to SMS’ reach. Also, native SMS should be an integrated
service within the RCS offering. It is a misconception that RCS will function as SMS 2.0, as even
RCS will not be able to match SMS’ reach within the next 5 years. A converged platform that
enables delivery of all messaging services from SMS, MMS to RCS and OTT, is the answer.
5. Enrich the SMS service. There are still many opportunities to extend the SMS service with new
features like notifications, black/white listing and group messaging. These types of features can
drive additional revenue streams and increase service stickiness. By using cloud delivery models,
operators can keep complex deployments at a distance and significantly decrease time to market.
6. Utilize the full potential of enterprise messaging. The high consumer dependency on SMS
provides opportunities in enterprises messaging as this market has not yet matured. In order to
fully utilise the revenue potential of Application to Person (A2P) messaging, operators need to
unlock the messaging infrastructure and meet enterprise requirements that will drive exponential
growth. This is even more relevant for MMS.

6. About Acision
As the global leader in mobile messaging, Acision connects the world by powering relevant, seamless
messaging services, which enrich the mobile communications experience and create new
opportunities for carriers and enterprises across the world.

Acision's proven innovation and expertise extends across our comprehensive portfolio of real-time
messaging and charging solutions and services, which have been designed to support our customers’
requirements across 2G, 3G and LTE networks, while enabling the monetisation of messaging
services and maximising total revenue capture.

Acision's messaging portfolio helps our customers unlock and protect the full potential of their existing
mobile communication channels, while supporting the evolution to IP/LTE services and increasing
return on investment. As a leading messaging provider, Acision is uniquely equipped to deliver the
future of mobile messaging services, powering innovation and profitable growth for operators and
service providers across the globe.

Acision’s charging solutions address a range of critical charging challenges being faced by operators
in today’s competitive environments to ensure differentiated pricing models and continued revenue
capture.

11

Acision Seizing the Opportunity in Messaging - US Consumer Research May 2012

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Acision Seizing the Opportunity in Messaging - US Consumer Research May 2012