Mobile Marketing Initiatives and Growing Mobile Subscriber Base to Drive A2P SMS Market

by John Warner Market Research

A2P SMS is a short text/multimedia message that is sent from an application, especially a web application, to a mobile user. SMS is a unique and ubiquitous technique of staying connected with people using basic feature phones without any additional access to data services. Worldwide, mobile network operators are mainly focusing on application-to-person (A2P) SMS applications to increase their average revenue per user/subscriber (ARPU). SMS, being the most familiar form of mobile communication, attracts a high proportion of users to enjoy the benefits of this service.

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SMS – A Reliable and Simplified Source for Operators and End Users

SMS is a fast and efficient tool for extending customer relationships. SMS sent from mobile subscribers to web applications is known as person-to-application (P2A) messaging. While the market for P2A SMS has declined due to the advent of various web messenger services such as WhatsApp, Blackberry messenger, and Snapchat, the dependency and use of A2P SMS application service has remained moderate across the globe.

With the help of A2P SMS application service, each communication can be a secure, private, and personal interaction. It doesn’t require new platforms or technologies and can be equally accessible on both smart and feature phones.

According to a leading market research company, the global A2P SMS market was valued at US$53.07 billion in 2013 and is expected to grow and reach US$70.32 billion by 2020. Growth in mobile marketing activities by marketers and application developers, increase in mobile banking, mobile payments, and mobile health services, and rise in the mobile subscriber base are the key drivers of the A2P SMS market. Owing to these factors, the overall market is expected to rise at a CAGR of 4.2% between 2014 and 2020.

Increase in Mobile Subscriber Base Fuels Global A2P SMS Market

The application-to-person (A2P) SMS market is poised for moderate yet steady growth in the next five years. This growth is mainly on account of an expansion in the mobile subscriber base across major regions such as North America, Asia Pacific, and Europe. It is also due to some of the main advantages of A2P messaging, such as helping organizations reach out and communicate directly with millions of mobile subscribers across the globe at cheaper costs.

Rise in the global mobile subscriber base and SMS traffic is benefiting a pool of stakeholders such as software developers, mobile content developers, aggregators, and premium messaging integrators across many regions in the world.

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The market is also growing due to the widespread implementation of A2P SMS application services in marketing messages, notifications, alerts, and flight alerts.

A2P SMS services find application in various industrial areas such as entertainment, tourism, ecommerce, healthcare, and banking and financial services. These industries rely on A2P SMS in order to reach out to several customers for various reasons. The customer relationship management (CRM) service is the major segment contributing the highest share of revenue to the A2P SMS market. Today, most companies spread across sectors such as travel, e-commerce, BFSI, and retail use A2P SMS for CRM as an effective way to increase their average revenue per user/subscriber (ARPU).

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