12 January 2022

Impact of 5G on A2P SMS Development in 2022: Progress & Predictions

Cloud & Data Center Cloud 
Impact of 5G on A2P SMS Development in 2022: Progress & Predictions

How much will 5G change the world? A lot. In 2019, Visual Capitalist predicted that the arrival of 5G would globally result in $13.2 trillion of sales activity in 2035. From manufacturing to wholesale, all industries will witness hundreds of billions in transaction. As a significant improvement from 4G, 5G will make everything a lot faster, and certainly, more efficient. Although the prediction says that 5G benefits can only be realized a few years from now, it’s safe to say that the motion has been set. And one sector that will be affected is A2P SMS.

A2P SMS: Current Statistics and Predictions for 2022

To understand how much 5G will affect A2P SMS, we’ll have to take a look at the industry’s current state, along with the predictions for A2P SMS in 2022. In general, A2P SMS will linger and stay relevant, as it facilitates easy communication between businesses and customers. Not only will A2P SMS stay, this means of communication will also grow in so many areas. Among these, 3 areas of growth particularly stand out. These are traffic & volume, the use of white routes, and revenues.

1. Traffic and Volume

Needless to say, A2P SMS traffic and volume will significantly increase as demands rise over the year, and the leading continent for A2P SMS traffic will be Asia. Juniper Research found that A2P messages sent by institutions will reach 3.5 trillion by 2023, which is a 40% increase from 2019 (2.5 trillion messages). As for 2022, the 2017 report predicted that the number of A2P SMS will reach more than 2.7 trillion. This growth of traffic is prompted by SMS open rate (95%), which makes it a very effective means for advertisers.

2. White Routes vs Grey Routes

It is predicted that the use of white routes in 2022 will remain high. White routes are legitimate channels that businesses can use to properly send A2P SMSes. On the other hand, grey routes are non-proper routes with lower fees that are used to send SMS without compliance to regulations. Mobilesquared predicts that in 2022, 85% of A2P messages will be sent via white routes, which is a significant improvement from 875 billion messages in 2017. Meanwhile, the use of grey routes will steadily drop by 11% from 2017 to 2022.

3. Revenue 

With more traffic and high amount of white route utilization, the A2P SMS global market is predicted to immensely grow in 2022. From 2017 to 2022, it is predicted that the A2P SMS market will experience a yearly 17.5% growth, and the global revenue in 2022 will reach $26.61 billion. Another prediction by Mobilesquared revealed that the potential revenue can reach up to $30.54 billion. These trends reveal that the year 2022 provides a lot of opportunities for businesses who wish to utilize and market A2P SMS services.

5G development impacts on A2P SMS

Even with the development of 5G, experts predict that we will remain dependent on SMS, due to its universal capability of reaching various devices. Instead of reducing the use of A2P SMS, 5G will provide opportunities for businesses to improve their A2P services. For instance, A2P SMS is often embedded with hyperlinks. With 5G’s super speed, cybersecurity risks increase, which means that there will be more demand to protect businesses and customers from SMS-based phishing and scams. 

While there are concerns about how the growth of RCS in 5G will affect SMS, most experts predict that the use of SMS will linger. Aside from its ease of access and the aforementioned universal capability, A2P SMS also presents certainty and effectiveness. With A2P SMS, messages will be received even without an internet connection, which makes A2P SMS ideal for reaching out to urban and rural areas alike. In addition, SMS’ high open rate is still unmatched by other forms of messaging, making it an effective business communication tool.

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