In a recent article (it's in Estonian, but you'll get the gist of it in this blog,) Tele2 - a local mobile network operator in the Baltics - highlighted a few interesting trends about the growth and decline of certain types of SMS messaging traffic.
We looked at some of our own SMS traffic data. Here's what we see.
It is a well known fact that the increasing use of data-based messaging applications and the growing use of the mobile internet has resulted in less SMS activity compared to only a few years ago. However, Tele2 pointed out a lesser-known trend: the rise of A2P (application-to-person) SMS messages. These are not messages being sent from one phone to another, but from a software application directly to a person's mobile phone (i.e., a company sending SMS messages through Messente’s platform).
Login PIN codes from online services, courier delivery notifications, doctor's appointment reminders, and bank notifiications, are all examples of A2P messages. Every industry uses SMS messages in a different way. For example, in a previous blog, we discussed how FinTech companies benefit from SMS.
Tele2 explains that while A2P messages were only 4% of their total messaging traffic a year ago, it is now 11-15% of their SMS traffic. Delivering customers’ SMS messages to over 500 networks in the world, we see the same trend occurring globally. The use of A2P messages is growing especially fast in industries like financial services, logistics, last-mile delivery, web security, and health services.
Based on our data, we see A2P SMS traffic growing much faster in Latin America and South-East Asia, when compared to Europe, but the reasons for this are too long to cover at this point. (We'll get to this point in another post.)
Analysts claim that A2P messaging will be a 60 billion dollar business by 2018, and will exceed 70 billion by the year 2020. The biggest source of growth will not be from marketing, as one might think, but rather customer relationship management, from on-boarding, to short notifications, and account security, throughout the entire lifetime of a customer.
SMS messaging is still the most universal way to reach out to someone, which is the reason for the ongoing popularity in SMS, despite other communication channels emerging, and disappearing, in the same space. It works regardless of location, the model of the phone, whether online or offline, and doesn't require a specific app to be installed.
There may be standards and technology that could be universal in the future, replacing SMS messaging almost completely. In any case, if you’re wondering, no, I don’t mean Facebook Messenger or WhatsApp.
However, this will also be a blog post for some other time.
Right now, we have no choice but to completely agree with Tele2: A2P SMS messaging traffic is growing. And it’s doing so everywhere in the world.