With over 23 million cellular phone users across the country, growing at 220 000 new customers per month, mobile technology offers the best opportunity for reaching huge numbers of people in the most direct and personal way.
Research suggests that over 89% of cellphone users use mobile applications like SMS. By comparison, SA boasts almost 6 million fixed lines, 3.5 million Internet addresses and 4.2 million postal addresses, mostly belonging to businesses.
When the cellular industry launched the wireless application service provider (WASP) model a few years ago, the intention was to spawn an entirely new industry within the greater cellular industry. Worldwide, the mobile value-added services market was already booming. Customers were able to download a myriad of ringtones, logos and other content while corporate customers were managing costs, boosting revenues and increasing efficiencies through mobile value-added services (VAS) solutions.
The networks indicated at the time that the WASP model would allow them to re-focus on their core businesses as the `pipes` channelling mobile content and data to cellular customers. The wide-ranging content and application development demands would be left to a myriad of smaller companies - WASPs - who would conclude agreements with the cellular networks. This strategy has been remarkably successful. At last count, the networks had WASP agreements with a phenomenal 170 companies.
A monster problem
The WASP model has, however, spawned a monster as the networks are simply not geared towards managing relationships with literally dozens of demanding WASPs
Pavlo Phitidis, CEO, Mira.co.za.
The WASP model recognised that cellular network operators are by nature technical organisations specialising in managing, maintaining and updating their mobile networks. This is in itself an expensive and time-consuming process.
The WASP model has, however, spawned a monster as the networks are simply not geared towards managing relationships with literally dozens of demanding WASPs. Many of these WASPs are small players monopolising the network`s administrative time and also their technical assistance because most of these players operate below industry standards, leaving consumers frustrated and compromising the industry as a whole.
The technical expertise required to manage multiple network interconnections and a plethora of bearers (SMS, USSD, MMS and seven others) is to say the least a full-time job.
The solution lies in aggregation, currently a global trend. Aggregator WASPs will provide the specialist service of mobile connectivity and will handle traffic management, billing administration and connectivity to the cellular networks. Other WASPs will be encouraged to link up to the aggregators to secure connectivity to the networks.
Selecting the correct aggregator WASP for a particular VAS deployment is a critical success factor. Aggregator WASPs should always have at least two server farms in different locations and run daily backups of critical information. Aggregators should also have multiple redundant links to all the cellular networks to ensure reliable and accurate connectivity and transacting.
Only a few WASPs are able to offer reliable connectivity to all three cellular networks across a range of bearer technologies such as SMS, MMS, GPRS, WAP, WIG, IVR, USSD and more. There is a false perception that the barriers to entry into the WASP industry are low. In fact, several expensive layers of investment are required to reach all South African cellphone users. This means it is expensive and time-consuming for anyone but an aggregator to secure connectivity.
For example, one cellular network introduced four new bearers last year alone. Establishing connectivity with these bearers requires an experienced team of technical staff and a well-established mobile platform. In addition, negotiations with the networks can take up to six months per bearer.
Cost benefits
Aggregators are in essence specialists. They specialise in delivery and quality of service. These two elements are critical in the corporate world where timely message delivery is imperative.
Using aggregators to secure connectivity is a more sensible choice for companies that want to focus on their core business and do not have the resources to keep up to date with the latest cellular technologies or manage complicated network billing and reconciliation issues.
For organisations wanting to get on with the business of marketing their products, the cost benefits of using an aggregator are compelling. Ultimately, mobile content and application providers should focus on the development and marketing of good content and applications, and not be distracted by issues that aggregators are better able to handle.
International companies are also finding it easier to reach SA`s mobile users by working through aggregators who already have all the necessary technology and relationships with the cellular networks in place.
The challenge increasingly faced by organisations is how to deal with the average Joe Soap, who happens to be their customer and therefore an important stakeholder. Mobile VAS can enable companies to manage and communicate with Joe Soap in a meaningful way and aggregation can help them to do so more efficiently.
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