In spite of the growing popularity of OTT messaging apps, the use of SMS as a channel for business communications will continue to grow over the next 10 years as more companies adopt A2P (Application to Person) services, according to a new report by Telefonica. The study investigates the development of SMS and its application for business, with Telefonica’s own A2P (or bulk SMS) business showing 22 percent global growth in 2014–15. The report adds that the ability of SMS to reach 99.99 percent of mobile devices globally with a 90 percent read rate within minutes makes it an ideal tool for businesses to reach customers, regardless of geographic and demographic factors.

Other recent studies indicate that the worldwide A2P SMS market was worth approximately US $55 billion in 2015 and that the figure will increase to US $60 billion by 2020 as more entities, such as SMEs and governments, begin to use the technology.

Tarifica’s Take

Telefonica’s report is an interesting sidelight on the much-lamented SMS and an encouraging take on its potential as a revenue source. Up to this point, most of the discussion of SMS has been on the consumer side, but A2P is an innovative and fast-growing use of the technology for businesses to communicate with customers and clients. Alerts, notifications and marketing messages are easily sent by this means, and these necessary and important communications constitute a promising revenue source for the MNOs, like Telefonica, that make them possible. While P2P is on the decline, A2P is on the rise, and operators should take note of that fact.