Revenues from A2P (Application to Person defined as messages which are sent both to and from an application) SMS could be worth almost $60 billion by 2018 up from $55 billion in 2013 according to Juniper Research.
The reach and reliability which SMS affords organisations looking to contact customers and employees remains far greater than many other forms of communication.
A2P SMS – Secure, Reliable, Ubiquitous
The report found that A2P SMS would see growth both in terms of traffic and revenues over the forecast period.
For organisations such as financial services or ticketing providers, SMS is the most secure and reliable option for A2P communications. Furthermore, it is ubiquitous — almost all handsets can receive SMS, however the fact that OTT messaging platforms frequently do not interoperate, and there are still a significant number of people without data plans, means they’re not appropriate for A2P communications.
P2P SMS – Sees Revenue Decline
However the growth in A2P SMS revenues comes at the same time as P2P (person-to-person) SMS revenues are in decline. Mobile operators are losing out as their customers switch to OTT messaging platforms which have the allure of ‘free’. MNO’s have reacted by aggressively bundling messaging into cheaper deals for users, squeezing their messaging ARPU and, subsequently, total revenues.