FACTORS AFFECTING MONETIZATION OF INTERNATIONAL A2P SMS SERVICE: A CASE OF VIETTEL GROUP

CONTENTS

LETTER OF DECLARATION 1

ACKNOWLEDGEMENT 2

CONTENTS 3

CHAPTER 1: AN INTRODUCTION 6

1.1.Background of the study 6

1.2.Research objectives and research questions 9

1.2.1.Research objectives 9

1.2.2.Research questions 9

1.3.Research methods 9

1.4.Research findings 10

1.5.Structure of the study 10

CHAPTER 2. LITERATURE REVIEW 11

2.1.A2P Service 11

2.1.1.Definition of monetization of A2P SMS service 11

2.1.2.Overview of International A2P SMS service market 16

2.1.3.Viettel’s A2P SMS Service 21

2.1.4.Factors effecting monetization of A2P SMS 25

2.2.Theoretical background 30

2.2.1.Parasuraman et al. (1985) 30

2.2.2.Parasuraman et al. (1988) [28] 33

2.2.3.Research by Cronin and Taylor (1992) [29] 34

2.2.4.Research by SS Mohamed (2019) [30] 34

2.2.5.Research by Amoah-Mensah (2011) [31] 35

2.2.6.The work of Felix Kombo (2015) [32] 35

CHAPTER 3: RESEARCH METHODS 36

3.1.Qualitative study 36

3.1.1.Sampling method 36

3.1.2.Methodology 37

3.1.3.Implementation of the questionnaire 38

3.1.4.Qualitative research results 39

3.2.Hypothesis development 41

3.2.1.Grey Routes Continue to Pose Threat to A2P SMS 41

3.2.2.Business Process 41

3.2.3.Fraud Detection and Handling 41

3.2.4.System Capacity and Intelligence 42

3.2.5.Human resources 42

3.3. Research models 43

3.4.Quantitative study 43

3.4.1.Sampling method 43

3.4.2.Questionnaire development 44

CHAPTER 4: DATA ANALYSIS AND RESEARCH FINDINGS 50

4.1. The results of statistical analysis describing the variables 50

4.2. The results of the test of the Cronbach’alpha scale: 50

4.3 Results of factor analysis to discover EFA: 51

4.4 Results of regression analysis 53

CHAPTER 5: DICUSSIONS, CONCLUSIONS AND LIMITATIONS 55

5.1. Conclusion and discussion of research results 56

5.2. Contribution and implication of the study 57

5.3. Limittation of the study 57

REFERENCE 58

BIBLIOGRAPHY 60

APPENDIX 63

TABLE OF NOTATIONS AND ABBREVIATIONS

Abbreviation Meaning

MOI Mobile operators increasingly

A2P Application to person

P2P Person to person

SMS Short Message service

MNOs Mobile Network Operators

MVNOs Mobile virtual Network Operators

P2A person to application

DoS Denial of service

IoT Internet of Things

LIST OF TABLE

Table 3.1.Following is detailed quantitative survey questionnaires that was conducted through Google form 45

Table 4.1: The results of the test of Cronbach’alpha scale 50

Table 4.2.Factor analysis to discover the dependent variable EFA 51

Table 4.3: Table of criteria evaluating the suitability of the model 53

Table 4.4: Table of model conformity verification 53

Table 4.5: Results of multiple linear regression analysis 54

LIST OF FIGURES

Figue 1: A2P SMS Fraud Diagram (HAUD, 2019) [11]. 13

Figure 2: A2P SMS General Workflow 14

Figure 3: Total global A2P SMS messaging income (2018-23) (Mobilesquared, 2019) [9]. 18

Figure 4: Total A2P SMS messaging income leakage (2018-23) (Mobilesquared, 2019) 18

Figure 5: A2P SMS Market Segmentation (Transparency Market Research, 2020) 20

Figure 6: Potential A2P income (2018 -2023) 22

Figure 7: Lost A2P Revenue (2018 – 2023) 23

Figure 08: Service quality gap 05 model 32

Figure 09 SERVPERF model (Cronin and Taylor, 1992) 34

Diagram 1. Diagram of the research model of factors influencing money from A2P SMS 43

CHAPTER 1: INTRODUCTION

Viettel is the largest Telecommunications Group in Vietnam and is the only telecommunications provider in Southeast Asia listed in the top 30 most valuable telecoms trademarks in 2020 in the world. With more than 120 million customers worldwide, the Group is present in 11 countries across 3 continents, including Vietnam, Burundi, Cambodia, Cameroon, East Timor, Haiti, Laos, Mozambique, Myanmar, Peru and Tanzania. Viettel also operates in different businesses including Telecom, ICT, Hi-tech Research and Manufacturing, Postal Services, Construction, Commerce, Importing and Exporting, IDC and so on. In 2019, Viettel recorded 10.7 billion USD in revenue and 1.6 billion USD in profit, making it the most valuable brand in Vietnam. Viettel’s brand value reaches US $ 5.8 billion and ranks 355th most valuable brand in the world in 2020. (VIETTEL GROUP, 2020) [24].

The purpose of this research is to determine the factors that affecting monetization of international A2P SMS (Application-to-person Short Message Services) service in Viettel Group. In addition, this research will analyze in depth the current situation and find out the shortcomings and limitations of the service, from which to offer effective solutions to optimize service revenue and ensure best service for mobile subscribers.

1.1. Background of the study

Application-to-Person Messaging, sometimes called business SMS or enterprise SMS, refers to SMS messages sent from a business to a person. (Bandwidth Inc. , 2020). Monetization is the process of converting or establishing something into legal tender (Wikipedia). A2P Monetization is when you optimize or achieve profit generation from previously unprofitable A2P SMS services.(AMD Telecom, 2020) [5].

The process of sending mobile messages from an application to a mobile user. A2P SMS messaging is also called enterprise or professional SMS. Businesses can use it in several technical modes to communicate with consumers, authenticate users of online services, or deliver time-sensitive alerts. In all the cases, communication is initiated from a business application, and not an individual’s mobile phone, as is the case with P2P SMS.

Typical examples of A2P SMS include banking notifications, critical alerts, SMS-based two factor authentication, automatic booking confirmations, loyalty programs and marketing notifications etc. Online reservation systems, different corporate platforms and support services have deployed A2P SMS to increase efficiency and improve communication. Financial institutions have been using A2P SMS for over 15 years, by delivering automated, event-based SMS notifications to their clients’ mobile phones. Examples include anti-fraud alerts, balance statements, payment reminders, withdrawal notifications.

The most popular modes of using A2P messaging are SMS API integration, access via a web interface (by obtaining a username and password), or the deployment of a professional enterprise solution.

A2P Monetization is when you optimise or achieve profit generation from previously unprofitable A2P SMS services. Four facts indicating the great potential of A2P Monetization: A2P SMS is a sector not fully monetized yet, which is projected to grow by 36% on an annual basis, according to Portio Research; It provides easier and more efficient control of network traffic, generating increased profits; According to estimates by the Communications Fraud Control Association, mobile operators lost approx. $3.8 billion in 2013 from malicious SMS and unpaid traffic; With traditional revenue streams, such as voice and P2P messaging, in decline, the industry needs new income sources to replace them.

The A2P Monetisation study questioned more than 50 MNOs from every region worldwide.

It takes a snapshot of the market for enterprise messaging, identifying the key drivers and barriers to growth. The study also reveals how MNOs view the market today and tomorrow – including an outlook for RCS. On average, MNOs reported that 60 per cent of their A2P traffic is domestic, while 40 per cent is international.

Broadly, the results address the following topics: The key issues MNOs face in the area of A2P SMS fraud; What methods they use to prevent it; How they view the potential of RCS, and its vulnerability to fraud; What form of regulation offers the best defence against malpractice.

A grey route is A2P messaging that originates outside of authorized networks, in other words non-commercialized traffic where there is no agreement between the sender and the receiving network. Specifically, many grey routes use P2P (Person to Person) channels to support A2P messaging. This helps cut down on costs for senders since service providers have historically used simple SMS billing policies for P2P sending, which results in a mutual forgiveness policy. With these billing policies in place, third-party content providers and aggregators can, and sometimes do, exploit the lower cost avenue, flooding these routes with illicit messaging. (Cequens, 2020) [18].

Results based on research and tests carried out by HAUD’s research team in Bangladesh, Vietnam, Indonesia, Thailand and the Philippines on unprotected networks indicate that most Operators are leaking in the region of 30% of their A2P SMS traffic to SIM box activity (Grey route).  On average, and backed by data collected internally, the price for an A2P SMS for the direct protected route is $0.04 in most markets in the region.  SIM box pricing, on the other hand, is averaged out at $0.0055. The discrepancy in pricing between direct pricing and SIM box pricing, therefore, is staggering.  Moreover, when one considers that the overall SIM box traffic in the markets analyzed is of around 30%, the business loss implied is highly significant. Most MNOs in the region are losing millions of dollars every month to this highly distributed, but potentially illegal activity (HAUD ARTICLES, 2019) [20].

From the evidence above, it can be seen that the Service Providers not using the official route of the operators will cause a lot of consequences for both subscribers and mobile operators. The purpose of this study is to find out the factors affecting A2P SMS monetization of Viettel Group, at the same time looking for a solution to maximize revenue from A2P SMS services and safety experience for subscribes in the telecommunications network environment.

1.2. Research objectives and research questions

1.2.1. Research objectives

 General  Research objectives

Research on factors affecting making money from A2P SMS service at Viettel Group. Thereby, proposing some governance implications to improve the quality of factors affecting the money check from A2P SMS service of Viettel Group in the coming time.

 Detail Research objectives

– Determining prefix effects to make money from A2P SMS services of Viettel Group

– Determine the level of correspondence of each factor to make money from A2P SMS services of Viettel Group

– The solution to Contribution, the perfect profix up to the monetization of A2P SMS service of Viettel group

1.2.2. Research questions

– The first, What factors affect making money from A2P SMS service of Viettel Group?

– The second, to what extent are each of the factors affecting the money making from A2P SMS service of Viettel Group?

– The third,Which solution contributes to perfecting factors that promote making money from A2P SMS service of Viettel Group?

1.2.3. Research methods

The research topic is applied both methods: qualitative research and

Quantitative research is intended to complement each other for positive research results and most accurate. Qualitative research was conducted based on group discussion method, In-depth interviews with customers who have used services at businesses Viettel and consulting experts to choose the necessary photo elements aims to make money from A2P SMS service at Viettel Group.

Quantitative research is done through direct interviews or email for customers who have used A2P SMS service at telecom service’s business Viettel. Data were processed using SPSS software, by a stool tool such as Cronbach Alpha to test the level of information technology of the scale, discovery factor analysis method, EFA, correlation coefficient analysis, analysis egression model to test the suitability of hypothetical model.