What the growing A2P SMS market means for mobile operators

Last updated: 07 November 2019

SMS has come a long way since Neil Papwell sent the world’s first SMS, “Merry Christmas” in 1992. SMS remains a highly trusted and popular channeldespite the rise of new over-the-top (OTT) messaging services like WhatsApp and Snapchat.

There is something about receiving an SMS that demands a user’s attention. It’s unlikely that you’ll have over a hundred unread texts, but if you’re anything like me, it’s almost certain that you have at least one WhatsApp group with dozens of unread messages.

SMS is evolving as operators manage the growing popularity of OTT messaging services. This is something we have spoken about before, and we think it would certainly be premature to believe that SMS is finished as a channel.

A2P: The future of SMS?

Application-to-Person (A2P) SMS is typically used by companies for alerts, notifications and marketing messages. Although some associate it with spam messages, there are some very useful applications for it. A2P messaging has scope for healthcare, financial and education services. For example, users can opt in to receive alerts from their bank when funds reach below a certain level, sign up for an authentication message if someone logs into their email, or receive an alert for an overdue appointment.

The key to success is understanding consumers’ appetite for A2P:

There are also some compelling reasons why SMS is still a channel of choice for reaching customers:

1. Everyone can receive SMS

SMS is the original mobile phone application and is installed on every handset in the world. SMS is global, whereas all OTT services are fragmented. In Asia people are using Line, WeChat, and Kakao, WhatsApp is dominant in Europe and Apple’s iMessage rules the States. And in parts of the world where data services can be patchy, SMS is unaffected.

2. SMS is secure

SMS is also the most secure and reliable option for A2P communications. This is important for organisations such as financial services or ticketing providers, who are sending sensitive data. Our Messaging Gateway Suite for example, guarantees security for subscribers, and has a firewall that protects subscribers against unsolicited SMS.

Our research suggests that A2P messaging can counter the loss of revenue from SMS, and in fact the market could be worth almost $50bn to the industry by 2018:

Let us know your thoughts on A2P SMS and whether you think it could significantly help operators, either in the comments below, or on Twitter @Gemalto.


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