The A2P goldmine looks to exceed £63bn by 2022

Whilst experts don’t have crystal balls to foresee how 2017 will play out, one thing is clear – in order to stay relevant next year and in the foreseeable future, companies need to start implementing better SMS-based engagement strategies. 

According to a market report published by Credence Research Inc. Global, the A2P (Application-To-Person) SMS Market is expected to exceed £63 Billion by 2022; making SMS the channel that keeps on giving. Short Messaging Service (SMS) is one of the easiest and most ubiquitous forms of communication to use. Although SMS technology is no longer deemed the backbone of peer-to-peer (P2P) communication, its reliability and universal nature makes it the preferred carrier technology for the application to person communication.   

In fact, the A2P SMS market is maturing; already experiencing healthy growth between 2013 and 2017, with A2P SMS traffic exceeding 2 trillion messages this year, it is expected to exhibit further growth over the next few years. During this period, mobile operators and third party service providers have introduced a wide range of services across industries that use A2P SMS for service initiation, monitoring and control.

Mobile operators are able to further unlock the A2P goldmine revenues through domestic and international A2P SMS traffic. This can be done by deploying an SMS revenue assurance platform and SMS firewall in order to protect subscribers and transform the un-monetised traffic into revenue generating route traffic. In developed countries where smartphone penetration is high, messaging apps are abundant and clearly impact Mobile Network Operator (MNO) messaging revenues as peer-to-peer traffic migrates from SMS onto IP. But in developing and emerging markets, where Veoo in particular has a growing presence (we now operate in 26 counties around the world), P2P SMS traffic continues to grow. 

Increased demand

Established markets such as Asia Pacific and North America have seen A2P grow as the introduction of innovative messaging platforms equipped with advanced APIs and messaging gateways has rendered A2P messages convenient and easy to use. These gateways and platforms simplify the process of creating applications used for the generation of A2P SMS. The increased demand for A2P SMS for applications such as push content services, interactive services, promotional campaigns, and customer relationship management services is driving the market in Asia Pacific. Whilst in North America the present prominent MNO players, the increasing need for A2P messaging platforms, particularly in financial institutions and banks, and the rise in application areas for these platforms has been a key factor. 

Based on Mobile Ecosystem Forum report 2015, A2P traffic estimations of 1.99 trillion, each of the 3.76 billion mobile subscribers around the world will receive on average 1.45 A2P SMS messages per day this year. A2P messaging is continuing to grow and the optimism surrounding its uptake no doubt comes from ease of integrating SMS. Many companies are now building apps that send messages and alerts through the software. As companies become more accustomed to communicating via SMS, their propensity to send messages to their customer database should increase exponentially.  So good old SMS is certainly going to be around for a while longer yet and there is definitely money to be made for businesses that utilise SMS.

Matthew Winters, CEO, Veoo