New Report Shows Increase In A2P SMS

Reports Indicate Stable Outlook For The A2P SMS

Recently, there has been an increase in the growth of A2P SMS in the business world. A2P (Application to Person) SMS is where an SMS is sent from an application mostly a web based app to a mobile subscriber. Today, most businesses are using these applications to communicate with their consumers, deliver time-sensitive alerts or even authenticate users of their online services. The A2P SMS service is faster and more reliable than the normal apps or mail conversations. According to this report by Telefonica, there has been an accelerating popularity of A2P SMS by organizations and businesses, and it is fueling growth in SMS usage globally.

Several statistics explore the growth of A2P SMS services, and they include:

  • Mobilesquared a mobile intelligence firm released a Databook that indicates that the A2P messaging market has increased its worth from $12.88 billion and they project that it will rise to $58.75 billion in 2020.
  • In the same report, they also forecast that gray route messages will drop from 65% of the total A2P global traffic in 2015 to 19% by 2020. This is due to the rollout of more next generation SMS assurance platforms.
  • According to a messaging report by MEF (Mobile Ecosystem Forum), 65% 0f clients or consumers communicate with businesses on different chat apps. This increases to 76% globally through SMS.
  • Telefonica has also released a Text Economy Report forecasting that banks, OTT providers and retailers as well will account for more than 60% of the global A2P messaging traffic by the end of 2017.
  • The banking and financial services today account for more than 40% of the market share for the A2P SMS market growth.

Global growth in the usage of A2P SMS

All these facts and reports by different companies show that there is a global increase in the usage of A2P SMS messaging services. The gradual and rapid growth in A2P messaging can be attributed to some of the many benefits it has as compared to the usual apps and emails messaging.

Most consumers today prefer SMS, and according to a poll done by the Direct Marketing Association, more than 43% of respondents say they would rather receive marketing messages and product details via SMS. Both the business and the consumer have a lot of benefits to reap by using the A2P messaging service.

Benefits of A2P SMS

  1. A2P SMS are sent from other sources apart from handsets such as web applications using a SMS Gateway to a mobile subscriber. This means that anyone can get access to the A2P messaging without a handset and use it in their business.
  2. Compared to e-mails, SMS are read in 94% of all cases within 3 minutes. There is no spam filter and no lag of mobile data connectivity.
  3. The A2P messaging service allows big businesses, content providers, and government agencies to reach a targeted audience at a lower cost. Imagine the cost of using Person to Person (P2P) messaging service, which can be a phone call or a written letter, as compare to A2P messaging. First of all the P2P messaging will be costly and would require a lot of time and resources such as personnel and infrastructure.
  4. SMS help increase customer interaction with sweepstakes, contests, and many others. It becomes easier for clients to enroll in contests because they only need to text a short code to register. It lets consumers feel involved in the business, and they can easily interact with each other by texting answers to trivia or poll questions.

This way, doing surveys also becomes much easier. It is easier for the consumers to text answers than to stop and respond to questions from a person or text using P2P SMS service.

Key Sectors

The rapid growth in popularity of mobile and digital services across the world especially in the developing markets like Latin America and Asia has created a global market where approximately 8.3 trillion text messages are sent annually. SMS has proven to be a valuable tool for one to many business messaging because it provides a simple, efficient and “on the go” way of updating clients.

“The text messaging market has however developed due to the success of free messaging apps like WhatsApp”

Text messaging has been part of our lives for long making it a trusted, intuitive and effective form of communication for most people. The text messaging market has however developed due to the success of free messaging apps like WhatsApp, Facebook Messenger, and Snapachat but the potential SMS messaging has on business is unrivaled.

This report has examples of real-life use cases like the Virgin Trains application of A2P communication that they use to manage peak hour commuters. This is an excellent example of the mobile engagement A2P messaging gives between the clients and an enterprise. It also helps differentiate Virgin Train’s services from the other transport operators.

The banking, financial and insurance services providers are the ones leading in the use of A2P messaging. The increase in employment rates means there is an increase in the number of bank accounts and financial services as well. This means these people will need constant and real-time updates on their banks and the extra services they offer. Figures are showing that in the financial services industry, A2P SMS services are being used more often than the app-based messaging services for customer engagement.

A2P Growth in the Future

It is interesting that almost a quarter of consumers have never received a text message or SMS from a business. This indicates there is an opportunity for prolonged growth in this channel. Today, SMS remains the most preferred way to maintain contact with clients by a wide margin with more than 50% of people estimating that they expect their use of SMS services to increase over the next one-two years.

A2P messaging services are easy and more convenient to use as compared to the basic apps or emails. The high growth in the use of the A2P messaging services can be primarily attributed to the different advantages the A2P messaging offers as compared to Apps and E-Mail messaging. There is an expectation to see the continued use of use of the A2P messaging services across different industries to cut through the information mess on mobile devices, therefore, providing personalized information to customers at the time they need it.

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