You may have missed the announcement from tyntec, on its Inter-Carrier Messaging Service (ICMS). I initially thought so what, just a revamp of their existing platform. But their implicit claim of breaking the Syniverse / SAP duopoly in the US made me do a little digging to understand what’s going on under the hood.
You most probably haven’t heard of Iris Wireless, they were in the telecom API space. But what is interesting, and I didn’t know about this, is they had peering agreements with Syniverse and SAP, one of only 3 contracts in existence. So tyntec has bought a peering agreement. Which means they get close to carrier wholesale rates, while Syniverse customers like Twilio pay higher customer rates. When you’re shifting billions of messages those differences in price add up. I do not know the details of the agreement / settlement, but its an interesting development in opening up the US telecom API market a little more. Which because of the vast differences between wholesale and retail rates is rather unstable.
How can Tyntec succeed where Iris Wireless didn’t? One factor is size of the business, tyntec has an established global business, and can bring that to bear in growing the US business. So Tyntec brings a little more competition to the old-boys club of carrier interconnect in the US. So what? Their cost basis is lower. But there’s more.
In my projects I’ve been recommending the need to consolidate the inter-carrier aggregation and cPaaS function in some countries as the market matures. The recipe on both sides of the business is understood, and consolidation helps not only on cost of operations, but supporting new capabilities enabled by IP communications. So tyntec are bringing this to the US, let’s see if they’re able to shake the market up.
Given Twilio’s war chest from its IPO, an acquisition could be possible if tyntec prove successful in the US market. Regardless of an acquisition, Twilio’s arm’s length approach to the messy and dysfunctional telco world will have to change as we see more consolidation across the web and telco sides of telecoms. The PSTN is currently on a path to becoming the network of last resort, but change doesn’t happen quickly in established telco services, and people have their preferences. Regardless of some people’s wishful thinking about telcos going away and a few internet companies ruling the telecoms world, they will likely not in my lifetime, so the PSTN remains an important part of being in the telecom API business.