importance of A2P SMS in a mobile messaging market

The rise of social messaging apps is impeding the market of person-to-person (P2P) SMS usage. But the continued growth of SMS revenues over the next few years will be driven by application-to-person (A2P) messaging, which refers to messages sent between users and applications.

Infoholic predicts that the transactional service is expected to dominate in A2P SMS market due to increasing retail and e-commerce transaction service and mobile banking.

Globally, increasing mobile subscriber base and world population are the key drivers for this market growth. The BFSI and retail verticals are contributing the major market share for the A2P SMS market growth. The research predicts that the global A2P SMS market is expected to grow at a CAGR of 5.7% during the period 2016-2022.

“Globally, A2P SMS market is expected to play a pivotal role in mobile messaging market. The increasing demand for the real-time information from the consumers will lead business to adopt this technology to improve their consumers’ confidence. In the next five years, emerging countries are set to be the future growth opportunity for A2P SMS players,” said Bhavya H, Research Analyst at Infoholic Research.

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As per the market study, in 2016, North America is set to be the strongest performer for A2P SMS market. The Asia Pacific region holds the huge growth opportunity for A2P SMS players in next six years, followed by Latin America and the MEA regions.

“A2P SMS has become a key revenue pocket for MNOs as A2P messages traffic is expected to reach 2.5 trillion by 2020. Many MNOs are only keen on their regional markets and not capitalizing international A2P traffic, which could rather be the actual revenue stream for them,” said Tariq Shaik from Research Operations of Infoholic Research.

Similar trends were noted in another research report released last month by Research And Markets that predicts the global A2P SMS market to grow $78.61 billion by 2022. Globally, transactional service will holds the major market share in A2P SMS market followed by promotional service, said the study.

The study shows BFSI and retail industry verticals set to be major verticals and contributing more than 40% of market share for A2P SMS market growth. The education and healthcare are set to be emerging verticals. Region wise, the study sees Middle East & Africa and Latin America holds the huge business opportunity growth due to increasing mobile subscriber base and set to be emerging region for A2P SMS market growth.

Earlier, Ovum predicted the number of worldwide A2P messages rise from 1.4 trillion in 2013 to 2.19 trillion by 2018. A forecast from Juniper Research estimates A2P revenues will grow from $55 billion in 2013 to $60 million by 2018, while instant messaging traffic will generate only $3 billion by 2018 despite increased usage.

Researchers observed that growth in A2P usage will increasingly come in a wide variety of uses and industries including account updates from banks, appoint reminders from healthcare providers, mobile event ticketing, confirmation of one-time passwords and flight updates from travel sites, to name a few.

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