Appify the Future
A few years ago, we asked the network operators for open API’s to their SMS & short-code billing infrastructure. Today, they have responded by promising to deliver secure API’s for SMS & billing to developers.
This is good news, and a big win for the developer community. Very soon we will be able to engage customers via API’s. What exactly does this mean for you? Engaging apps can now be easily monetized to allow developers tap into the revenue stream of VAS that networks and content providers have enjoyed over the last few years.
It also means that VAS generated revenue will soar as big players and indie developers take advantage of the opportunity. The stock of the mobile developer just went up as existing CP’s will scramble to fill their ranks with skilled mobile developers.
The revenue generated from existing SMS based VAS, while steady, among feature phone users has failed to latch on with smartphone users. Most of these short-code services are just a Google search away. OTT services are fast eliminating potential revenue from network operators, due to non-existent means of building services on API’s from the operators, which causes new developers to find ways around them.
The cumbersome amount of legwork required to reach out to multiple networks and make deals is only available to the big players, (Microsoft, Samsung, Facebook, Google, etc…), and it leaves serious fragmentation in services delivered by excluding certain consumers or having differential pricing.
What is yet to be known are the revenue splits the networks will impose on developers, and if over time we will see the profit margins thinned, as was the case with SMS short-codes. Unfavorable revenue share may hinder the adoption as the ARPU is increasingly dwindling, and it may be profitable to seek other avenues of monetizing.
SMS services have little differentiation from each other aside from the content being delivered, however, apps require a more nuanced approach for each encounter with the user. This also means an active user is more loyal to an app than a generic SMS where the only thing identifying users is a phone number. The rise in apps using these API’s will mean a resulting rise in data bundles sold and consumed, which will increase customer loyalty to the network.
MTN is leading the way with secure API’s for developers and we expect other networks to follow them into this new opportunity. So far the promise has been a long time coming, we now only wait for it to be gift wrapped and delivered. We look forward to the eventual roll out of these API’s and others to follow, as well as the new frontier that it will open up for African developers.