NEXT-GENERATION MOBILE MESSAGING NEEDS & ARCHITECTURES Course Faculty: Mrs Yasmin Malik Venue: IBA City Campus, Karachi Course Start Date: Spring 2012 (Feb 1) MIS553: Mobile Marketing Strategies

Limits of Legacy SMSCs  Current legacy SMSCs are built on the “store-and-forward” delivery model  These systems have been pushed to their limit and are falling behind in terms of cost, performance and operating efficiency  Store-and-forward:  SMS message is routed initially to the SMSC where it is stored and then forwarded  Since 85-95% of SMS messages can now be delivered on the 1 st attempt, most of the initial processing that the SMSC does to store, query and forward messages is largely wasted  Architecture does not scale cost effectively  Store-and-forward delivery causes latency (delay) and inefficiencies  Outdated hard-coded logic employed by SMSCs does not easily support new delivery models and the creation of advanced messaging systems

Next-Generation Mobile Messaging Needs  To remain relevant in the current world-wide data-centric usage of mobile services, Operators are looking at deploying new all-IP (Internet Protocol) based messaging services  This is so that they can remain relevant and secure future messaging-based revenues  Also: SMS is a circuit-switched service  It has to be migrated to an IP-based service before it can be supported by packet-switched networks  This requires new delivery mechanisms to deliver SMS in the LTE/IMS environments which are 4 th Generation networks: (LTE = Long Term Evolution, an all IP-based network) (IMS = IP multimedia subsystem, an all IP-based network)  NOTE: more about LTE networks later in the course, but for now we will concentrate on SMS delivery

Legacy SMSC Network Architecture Source: Adapted from Informa Telecoms OAM = Operations, Admin & MaintenanceSTP = Signal Transfer Point (router that relays SS7 messages)

New Mobile Messaging Network Model Source: Adapted from Informa Telecoms The New Mobile Messaging Network can be deployed in conjunction with existing messaging infrastructure to grow capacity/capability or to create a complete End-to-End mobile messaging network 3 Significant Functionalities wrt SMS Marketing Delivery: 1.SMS Router: features First Delivery Attempt (FDA) 2.SMS Store: to handle SMS traffic/bulk SMS surges during marketing campaigns 3.SMS Ad Insertion: to facilitate “In-message” advertising via the Operator

The Problems This Will Help Overcome  From the technology point of view, the New Mobile Messaging Network model can help us overcome the following issues when carrying out SMS- based mobile marketing:  Straining of the network by increasing volumes of SMS traffic  Handling traffic spikes created by SMS bulk-load generators used for marketing campaigns  Leveraging existing SMS architecture to generate new revenue

Case Study 1: Reducing SMSC Storage Load  The Issue:  Existing SMSC Infrastructure based on store-and-forward technology, is being strained by increasing volumes of SMS traffic  All local messaging traffic must pass through the SMSC even though only 5- 15% (max) of that traffic needs to actually stored for retry later  Most of the initial processing that the SMSC does to store, query and forward messages is largely unnecessary  Hence a way must be found to reduce the number of messages that have to be stored  And also to reduce costs by improving message-delivery efficiency  Is adding additional SMSCs the answer…?  No!  A Smarter Solution: FDA = First Delivery Attempt via SMS Router 1. The SMS Router delivers the mobile-originated Message (MO) as soon as it arrives, bypassing the SMSC 2. Placing the SMS Routers closer to the MSC balances the signaling load on the network 3. If the FDA cannot be completed, the message is sent to the SMSC for traditional store and forward with retry at a later stage Source: Adapted from Informa Telecoms

Case Study 1: Reducing SMSC Storage Load  BENEFITS:  The SMS Router’s FDA capability reduces the need to store and forward messages and eases the load on SMSCs by as much as 85-95% eliminating capacity bottlenecks  Overall network performance is improved as it frees up capacity for existing SMSCs  The SMS Router can be configured for versatile and flexible routing rules on virtually any SMS parameter (sender, recipient, content)  Messages can originate from SS7 networks via an SMSC, MSC or STP or from an IP connection via an SMS application or cross-network gateway

Case Study 2: Bulk-SMS Application-Originated Traffic  The Issue:  Existing SMSC Infrastructure is being overloaded by increasing traffic loads generated from Bulk-SMS applications  Legacy SMSCs were originally designed to handle the relatively predictable traffic created by simple texting  They were not designed to handle the spikes created by SMS bulk-load generators used for marketing campaigns  Once an SMSC reaches full capacity, it cannot process any more messages which results in applications and subscribers receiving error messages, message retransmission and overload  QoS is difficult to maintain in such a scenario  Is adding additional SMSCs the answer…?  Possibly – but this is a costly and inefficient approach  A Smarter Solution: Using the SMS Store to Manage Application-Originated (AO) Traffic 1. The SMS Store handles the application-originated traffic again essentially bypassing the SMSC 2. High-priority SMS traffic can be delivered in this manner by committing bandwidth to applications such as bulk messaging, hence improving QoS Source: Adapted from Informa Telecoms

Case Study 3: Delivering Operator-originated Mobile Advertising  As we have seen, SMS popularity and usage is increasing but revenue per SMS is not  How can Operators leverage the existing SMS architecture to generate new revenue?  The Operator can take on the role of creating mobile advertising programs by inserting sponsored texts (branding, sports, news etc.) into mobile-terminated (MT) SMS messages  This is known as “In-message” SMS marketing  Branded content can be added before (prologue) or after (epilogue) the existing message  Note the difference between short-code/opt-in and the different types of Operator-driven SMS marketing  In Operator-driven SMS marketing, the Operator can collaborate with a brand on the strength of its profiling capabilities (e.g. Boots) or it can leverage the strength of its own brand by offering other brands the option of appending branded messages to Operator controlled messaging

In-message SMS Based Ads  In-message SMS has been an opportunity for many Operators over the last few years  The same phenomena is practised in Pakistan’s cellular market especially for the promotion of the MNOs own services/offerings/deals  It generates new revenue and increases customer loyalty  MNOs own a very unique asset: access to real-time demographic and behavioural data  Viewed by subs as VAS and by advertisers as “distinctively personalized and relevant communication” and valued as such  Unlike virtually every media from newspaper to Cable TV, MNOs have full control over their networks  They have the luxury of choosing which brands and content they carry  In-message SMS by Coke appended to e.g. Vodafone UK’s voice mail notification Which is “The Brand?”

Examples of In-message SMS Closer to Home U have subscribed to Fortnightly SMS Rs 25 + T. Valid till 01/09/ Dial karein 555 aur latest ganey 20 paisas/min + t Ur Fortnightly SMS Package has expired. Send SUB to 603 to renew ur subscription Samait lain Mah-e- Ramzan ki Rahmatain 786 subsribe karain aur Ramzan alerts aur Bazariya lucky draw Jeetain Hajj ki do return Rs 15/M Ufone Ufone/KFC Your balance has fallen below Rs Ufone-KFC Mazedar Deal! Sirf Ufone customers ke liye! Buy 1 Zinger Burger + drink Get 1 Chicken Burger + drink absolutely dine-in, Take-away and delivery

Case Study 3: Delivering Operator-originated Mobile Advertising Source: Adapted from Informa Telecoms 1.The Operator can deploy an Advertising Insertion Center into MT SMS messages, adding epilogue or prologue branded messaging to existing service messages – text separators are included to differentiate between Operator original and branded messages 2. If required, by using subscriber profiles, the content can be targeted – but the option of sending out Bulk SMS for a particular brand is also there e.g. nationwide or city-wide Ufone/KFC campaign 3. The Operator-managed Ad IC examines the MT to determine if texts needs to be inserted. If so, it selects the text to be inserted from a pool of active messages or a 3 rd party ad server. Ad server’s inclusion at the Operator’s discretion provides another revenue generation opportunity for the Operator. 4. The message is transparently forwarded to the destination and acknowledgement of successful delivery is sent to the originated SMSC 5. Note the inclusion of the SMS Store: if delivery is unsuccessful, the SMS Store performs a retry

Case Study 3: Delivering Operator-originated Mobile Advertising  BENEFITS:  With its own Ad Insertion Centre, the Operator is able to: Enhance customer loyalty with relevant and targeted campaigns that add value Expand market opportunity Leverage the existing SMS infrastructure to generate new revenue