Messaging

Leveraging The A2P Messaging Opportunity

Leveraging The A2P Messaging Opportunity
By Harish Thyagarajan . 17 Jul 2020 . image 7 mins read

The A2P (Application To Person) SMS market has grown remarkably in the recent past. Its upward trajectory is unlikely to change in the near future. For businesses, A2P messaging is one of the most reliable channels that facilitate active customer engagement. Furthermore, this communication channel is extensively utilized across multiple industry verticals, including retail, finance, logistics, transport, and healthcare. 

In addition to this, the large-scale penetration of smartphones across the globe, the huge security offered by mobile networking systems, and high open rates of SMS messaging will skyrocket the popularity of A2P messaging activities over the forthcoming years.

The Growth of A2P SMS

 

source statista
(Source – Statista)

According to Statista, the global A2P SMS market revenue was $52 billion in 2017 and is expected to touch $78 billion by 2022. The A2P SMS market has experienced outstanding growth and adoption in recent years, and this trend is expected to continue for the next couple of years. 

SMS’s ubiquitousness ensures maximum reach, even to customers who live in the remotest areas, and this is one of the main reasons why businesses prefer having SMS as their primary channel of communication. Many industries, including the BFSI industry, are adopting SMS for security authentication purposes. High adoptions of A2P SMS have resulted in the revenues of A2P surpassing P2P (Person To Person) SMS and is prompting businesses to launch and innovate products and solutions in it.

2 Key Drivers of A2P Messaging

Since its emergence, A2P SMS has been growing massively, and it is currently one of the popular mobile mediums through which companies connect with their end-users.

Below mentioned are two vital factors that are contributing to the growth of the A2P SMS market.

Cost-Effectiveness

A2P messaging is not just cost-effective; it also has a broad reach, enabling companies to interact with consumers anytime, anywhere in the world. Given the high open rate of SMS, A2P offers an excellent opportunity for businesses to achieve a healthy return on their marketing investments.

Increased Use of A2P Services in Customer-Focused Industries

A2P messaging is a quick and reliable way to connect with consumers at every stage of their interaction with a brand, making it ideal for any customer-facing industry. As a result, there has been an extensive usage of the A2P messaging in customer-centric verticals such as Healthcare, Retail and Financial sectors.

Are OTT messaging services a threat to A2P SMS?

Person-to-Person (P2P) SMS used to be a huge revenue driver for mobile network operators, as people sent billions of messages a day. However, things have changed drastically in recent years; Over-The-Top (OTT) messaging services like WeChat and WhatsApp have displaced the P2P SMS market.

There has been a substantial decline in the revenue and volume of P2P SMS. The communication channel, which was once extremely popular, has lost a significant chunk of share in the market, leaving operators wondering how they will be able to reclaim their lost revenue.

Even though the OTT message volume has grown considerably at the expense of SMS, when it comes to the A2P SMS, there is no serious threat from OTT services. In fact, OTT messaging services are directly contributing to the growth of the A2P SMS. 

For example, consumers must receive A2P SMS even to begin using most of the OTT messaging apps. To activate their OTT account, users have to enter a unique code that they receive via SMS, and then, on occasions where users must authenticate their identity, they will have to key in the unique code that they receive via 2FA SMS. For businesses, SMS is still the defined channel for business communications.

The distinction between business messaging and personal messaging has to be recognized. Recent research conducted by Dialogue Group showed that A2P SMS was far more accessible for business communications than OTT messaging services. Brands must, therefore, consider SMS as a trusted and valuable means of communication to reach their customers.

Final thoughts

SMS enjoys widespread use among enterprises and is set to remain a key communication channel for businesses in all verticals for the next several years. Network providers and communication companies are working to ensure that A2P SMS continues to play a vital role in enterprise messaging. 

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