Arpu Plus is negotiating with three banks to provide them with mobile messaging services. The company is also in talks with a number of private universities to offer its services. In an interview with Daily News Egypt, Sherif Nessim, the messaging director of the company, said that the company expects a growth in text services by 10% per year over the coming three years. Nessim noted that some reports expect the size of the A2P activity to reach $50bn by 2020.
What are A2P services? A2P means Application to Person. The messages sent from mobile phones are two kinds: the P2P and A2P. The second one is sent from apps to a person or a group of people as a feedback after using services. The examples of this include the texts received by clients after using the services of banks, or the messages received by clients from Facebook and other social media platforms. Our services in this area are distinguished by our ability to serve across the Middle East. This helps our corporate clients, as instead of contracting with a different provider in each country, we operate across these countries. A2P services are two parts: feedback after conducting a transaction, and advertisement. According to some specialised reports, text messaging is the fastest way to reach the client where the client opens the message during a period of between 45 and 90 seconds, unlike emails—which clients could even ignore. Moreover, if the text comes from a known brand, the client then feels the attention of that brand. Also, customers only open 14% of the emails they receive, unlike texts, where customers open up to 95% of. The database is the capital of your work. How do you obtain it? Databases have laws that regulate them, especially if they are for advertising purposes. Advertising messages can only be sent to the customer of the same companies. Some mobile operators allow their customers access to these services without giving us the database. For example, they agree with a company to send advertisement messages to a number of people limited to a category group, such as location, age, gender, or value of bills. Both parties also agree on a specific number of messages for a cost. The operator then sends the messages itself, without giving other companies the database. What are your competitive advantages? We have the ability to provide services in any country in the Middle East as a result of strong relationships and previous experience with the majority of mobile service providers in the region. Therefore, we have the ability to contract with companies that provide services at the regional level. We also have a previous experience in this field. We have been offering our services since 2003. We have market power and technology. Our messages reach clients in a maximum of 10 seconds.
In how many countries do you currently offer your services? We currently offer our services in 20 countries in the Middle East, in cooperation with over 40 mobile service providers, including Telecel, Omantel, Viva, Asiacell, STC, MTN, Etisalat, Mobily, Zain, Orange, Vodafone, Wind, Du, and Djezzy in Egypt, Saudi Arabia, Iraq, Sudan, Algeria, Morocco, Oman, Kuwait, Qatar, Pakistan, Bangladesh, Jordan, Tunisia, Italy, and Zimbabwe.
What growth opportunities do you see in the Arab region in A2P services? In the Arab region, there is considerable growth in the A2P part related to transactions, due to the non-proliferation of technology and the presence of a large number of entities and institutions. Besides, banks in the Arab region are still not very reliant on technology, which allows the spread of text messaging services, unlike Europe, for example, where all banks are working with technology.
The expected growth in the Arab region is higher, thanks to the great growth of social networking applications in the Arab region, which use these services to verify the user's identity. In addition, there is a growth in the use of Internet and smartphones.
We expect the market to show compound growth during the coming period by 10%. Some reports even expect the size of the activity of A2P worldwide to $50bn by 2020, in which, the Arab region will account for a share between 8 and 9%.
What is the largest market in the region in the A2P services?
Egypt is a large market in the Middle East region due to the presence of approximately 100 million clients. Saudi Arabia, Iraq, and Morocco, too, are prosperous markets. These countries are currently experiencing rapid growth, but Saudi Arabia is the most likely market for growth in the coming period.
Which is the most prominent sector that sees opportunities for growth in A2P services? The financial sector—especially banks—believe that they have great opportunities to rely on the services of A2P services, along with insurance, financial transactions, and stock exchange companies. We are negotiating with three banks, including a major one. There are other sectors, including marketing and education. This is the reason why we are now in talks with several private universities.
In the section of advertising messages, many users complain about receiving ads without their consent. What should they do in this case?
In this case, the customer must organise this with the service provider. The market in the Arab region is generally unorganised in this part, unlike in Europe. For example, there is a clause in the contract that provides the customer's consent to receive advertisements. Therefore, the market in the region still needs more regulation.
The country is going through the recent period of difficult economic conditions, which caused the reduction of advertising spending. Does this affect you?
Ad spending has already declined over the past period due to the pressure of economic conditions, but advertising spending has decreased for traditional means such as television ads, newspapers, and other traditional means, while a large part of their advertising budget was directed to digital means, such as the A2P, considering their effectiveness. Through this service, the brand can specify who receives the ad, their age, and their location, making it easier to target specific users at a cheaper rate. The SMS advertising services saw an annual increase in traffic by 40%. After companies used to dedicate 10% only, this figure is now 50%.
What are the most prominent growth opportunities you see in the market during the coming period? For A2P services, we provide integrated services. We have good experience in this sector, and, therefore, we believe this sector is a good candidate for growth. We expect that this will have a reflection on us and our services. In addition, the spread of the Internet and mobile phones will contribute greatly in the growth of such services.
What are the most prominent features of your plans during the coming period? We are putting communication solution services on top of our priorities in the coming period, such as A2P, IVR, and SMS. Other important services are P2P services. These services are provided directly by us to clients, instead of relying on mobile operators, such as Shofha service, which enable clients to watch summaries of series for a fee. Also we have the Muzic Up, which enables users to upload their musical clips then make them available for the company's clients to use them as a call tone. We will also focus on another product called Connekio, which is a premium connectivity gateway in the MENA region. It is one of the very few aggregators that provides Bulk A2P messaging as well as other 2 way short codes connectivity, filtering, and fraud management systems. What markets do you intend to expand? We aim to expand the African market significantly, especially as it is a promising with a geat opportunity for growth, because it is still early in the information technology sector. We are currently working in Zimbabwe over the past three years, but we hope to boaster expansion there in the countries of Ghana, Cote d'Ivoire, and Nigeria. We plan to expand in developing countries such as Malaysia, Indonesia, and Sri Lanka.
