Overcoming Monetization Challenges in A2P Messaging

The Application-to-Person (A2P) messaging industry is approaching a critical point. Despite being a vital revenue stream for telecom operators, the channel is under pressure to charge high for SMS, constant competition from Over-the-Top (OTT) platforms, and low trust in the SMS channel. According to MobileSquared January 2024 projections, 60% of the markets are already declining, and the CAGR of A2P SMS is set to decrease by 3.55%. With Average Revenue Per User (ARPU) stagnant, finding ways to monetize the more recent Gs (5G) and extract revenue from existing channels has become a key objective.

In such a scenario, telecom operators need to rethink their monetization strategy. Traditional rule-based systems, once dependable, are proving inadequate to meet modern complexities in the telecom environment. Advanced analytics are emerging as the missing link in monetization strategy. The blog will explore how telecom operators can overcome challenges in monetization by integrating analytics and futureproofing A2P messaging revenues.

The current gap in A2P monetization

Most telecom operators still work with legacy monetization stacks: rule-based firewalls, static rate cards, and limited intelligence. Significant A2P potential is left untapped since grey routes and high-value traffic flows cannot be accurately identified. Let us understand the gaps: 

SMS Firewall Adoption

While 81.3% of mobile operators have adopted next-gen messaging firewalls, one out of every five players is still vulnerable to telecom fraud. This 18.7% adoption gap directly translates to lost revenue opportunities and non-enforcing enterprise SLAs, especially in emerging markets where A2P messaging continues to grow. It also signals a deeper issue: if one-fifth are behind on the foundational enforcement, how many are using dynamic pricing, traffic analytics, and customer segmentation? The absence of next-gen messaging firewalls is a symptom of a more significant problem in A2P monetization. 

Reactive approach to SMS fraud

SMS fraud is evolving quickly, but many operators still rely on legacy, rule-based systems that respond after the damage is done. As threats like grey routes, SIM box fraud, and artificially inflated traffic become more sophisticated, these systems do not detect them in time. This lack of real-time fraud visibility directly affects A2P monetization. With proactive analytics, businesses can ensure that every billable is captured, protected, and priced correctly. 

Limited Intelligence

Blocking grey routes with advanced firewalls is essential but not enough. Without advanced analytics that provides visibility and intelligence into traffic patterns, message context, and enterprise behavior, operators can’t fully capitalize on the traffic they have secured.  McKinsey also highlights that advanced analytics offer opportunities to generate significant value and cost efficiencies on both the customer and network front. Actual monetization begins when operators can protect value and strategically grow it through data-informed decisions. 

Advanced Analytics – The missing link in the A2P Monetization Strategy

Telecom companies have been leaving money on the table by underinvesting in advanced analytics in their A2P business. Advanced analytics fills the gap that legacy systems and outsourcing models leave behind. It turns messaging from a cost center to a revenue engine for telecom operators.  

Advanced Fraud Protection

Traditional SMS firewalls rely on static, rule-based filters that can’t keep up with sophisticated tactics like Artificially Inflated Traffic (AIT), SIM box fraud, and smishing. AIT alone is believed to be 5% of all A2P international traffic, costing brands $2.4 billion between 2022 and 2024. Advanced analytics enable operators to shift from reactive to predictive protection, detecting real-time anomalies. 

McKinsey highlights that B2B segments like A2P have enormous untapped potential, which can be realized through advanced analytics. By proactively identifying fraud before it affects A2P traffic, operators can ensure every enterprise message is accurately billed and delivered. Thus restoring control, trust, and consistent revenue in their A2P business. 

Granular Customer Segmentation

Most A2P pricing today does not monetize the actual value of enterprise customers. Operators often overlook how message volume, content type, and customer lifecycle impact profitability. With advanced analytics, telecom providers can group enterprise clients based on behavior, value, and engagement patterns. The result? Operators can offer personalized pricing, smarter bundling, and stronger retention.  

By segmenting customers based on similar characteristics, operators can create long-term engagement to upsell and monetize untapped potential. Aligning offers to actual usage converts the A2P messaging revenue model from generic to personalized. 

Implement Dynamic Pricing

Dynamic pricing is not just a technical feature. It is a shift in how A2P messaging is monetized. Instead of treating all A2P traffic equally, operators must differentiate the message based on urgency, enterprise intent, and network impact. OTP during peak hours, promotional messages during high-engagement windows, or time-sensitive alerts during service disruptions carry different economic value.  

Yet most operators are locked into fixed pricing frameworks that overlook these nuances. Operators can create a responsive pricing model with advanced analytics. This isn’t about charging more–it is about charging right. A real-time pricing model that scales with demand, safeguards margins, and optimizes prices per message or campaign ensures A2P messages are monetized better. 

Omni-channel readiness

SMS is no longer the only enterprise messaging channel. Customers expect to receive critical updates, alerts, and promotions via WhatsApp, RCS, and push notifications, often within the same journey. This is a monetization expansion opportunity for telecom operators only if the operator is positioned to manage and monetize it. And inaction here is not neutral; it is an open invitation for competitors to take over the messaging layer and the client relationship 

Advance analytics makes this possible by offering channel-specific optimization through coordinated delivery, better performance, and applying intelligent pricing across platforms. It closes the monetization gap against CPaaS and OTT players and makes telecom operators a strategic partner for digital communication.  

Final Thoughts

Monetization, going forward, will be powered by how well operators understand the behavior of their enterprise clients, the context of each message, and the economies of every delivery path. That level of advancement can’t be achieved through legacy billing systems or volume-based pricing contracts. It requires a deliberate investment in tailor-made solutions that combine advanced analytics to gain control in the A2P messaging market. 

Modern A2P modernization platforms make all the difference in such cases, focused on empowering the operators. They create intelligent control points that allow telecom businesses to price smarter, retain enterprise clients longer, and futureproof A2P revenue. Broadband Telecom’s A2P messaging solution adds that intelligence layer to your A2P SMS medium.  

Futureproof your A2P messaging services with advanced filtering mechanisms and analytics. Reach out to our experts to learn more about how our offerings can help you enhance your revenues.