28 December 2021

The Bright Future of SMS A2P in Delivering Business Communications

The Bright Future of SMS A2P in Delivering Business Communications

27 years after the first SMS was sent, this channel is still playing an important role for people and businesses to deliver their communications effectively and efficiently. In today’s marketing landscape, SMS is seen as one of the most reliable communications tools for business. 

Research shows that SMS open rates are as high as 98%, compared to just 20% of all emails. Not only that, 75% of people said that they’d be happy to receive an offer via SMS and 65% of marketers say that SMS marketing is a very effective method for them.

With these facts and statistics, it is no surprise that more and more companies are investing in SMS A2P (Application-to-Person messaging), a software that can be programmed to send text messages to individuals. 

This technology can be used to send notifications, account updates and security measures such as one-time passwords. 

As many businesses are building their communication strategy around SMS A2P, here are some key predictions for the A2P messaging forecast in the future.

SMS A2P’s market value is forecasted to reach USD 62.10 B in 2025

The global SMS A2P is predicted to reach a value of USD 62.1B in 2025 with the compound annual growth rate (CAGR) of 4.4% from 2016 to 2025, a study by Report Linker suggested. 

This massive market value is driven by the increasing adoption of mobile phones globally. SMS A2P is proven to be beneficial for any industry vertical, including banks, healthcare, transportations, retails and many more. 

While in developed countries, mobile phone user internet penetration is high, in many developing and underdeveloped countries, the penetration of mobile internet is still low and SMS is the preferred channel of communication that has the maximum reach.

40% growth of SMS A2P, reaching 3.5 trillion messages in 2023

A new study from Juniper Research found that 3.5 trillion business SMS A2P (Application-to-Person) will be delivered by 2023, up from an estimated 2.5 trillion in 2019, a 40% growth. 

Despite the challenge from other messaging technology such as Rich Communications Suite (RCS) and Over-the-Top (OTT) messaging, A2P users will continue to use SMS because of the familiarity of this technology and its ability to reach out to people in the most remote area, as it doesn't depend on an internet connection to work.

SMS will be accounted for 75% of the enterprise A2P spend in 2024

As businesses worldwide are more eager to communicate directly with their customer base, the SMS A2P market is therefore growing strongly in terms of traffic and enterprise spending in all global regions. 

SMS will remain the domi0t A2P channel, due to its reliability and universal reach, higher read rate compared to other channels, and its ability to ensure security and spam protection filters. 

In 2024, SMS is still accounted for 75% of enterprise A2P spending with 60% of A2P traffic, a research by Analysys Mason said.

Continuing to grow strongly, the key success of SMS technology is its ability to adapt in a rapidly changing environment and dynamic technological landscape. 

As global companies strive for more effective customer engagement, SMS A2P has become the growth vehicle behind business messaging. Moreover, research and statistics showed that this channel is not only ready to serve current business needs, but is also predicted to deliver more values in the future.

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