Application-to-Person (A2P) SMS messaging is still an important communications medium, despite the inexorable rise of alternative methods like OTT apps and flash calls. In fact, it remains the most wide-reaching and efficient messaging medium – if senders select a reliable and trustworthy supplier.
The key benefit of A2P SMS is that it has ubiquity and reach. SMS is available on virtually all mobile devices, making it a highly accessible communication channel. It doesn't rely on internet connectivity or specific applications, is reliable, has high delivery rates, and doesn't require users to be online to get messages. Banks, for example, have long used A2P SMS for authentication and promotional purposes.
Approximately 2 trillion A2P SMS messages are sent yearly for things like one-time passwords, bank notifications, and alerts, or booking confirmations. While the A2P messaging market is expected to keep growing in the coming years, the proportion of SMS is predicted to drop from 92% in 2023 to 66% in 2028.
As with any technology, new entrants to the market always offer alternative mechanisms and present new threats. A2P senders have shifted some SMS messaging to other platforms, such as OTT apps like WhatsApp Business. WhatsApp Business has seen steep growth in recent years: the service generated revenues of just $38.7 million in 2019 and is forecast to grow to $3.6 billion by the end of 2024.
Flash calls are another solution that companies have moved to as a potential alternative to A2P SMS. Last year it was thought that flash calls might be the next big thing in A2P, but they haven’t really taken off as anticipated and the number of flash calls remains quite limited.
However, flash calls can also be exploited for fraudulent activities. There have been increasing reports of scammers deceiving individuals into unwittingly returning calls and incurring high charges. Flash calls can also be used for distributing spam or initiating phishing attempts, and they’re difficult to differentiate from ping calls, as in the high-profile Wangiri example.
RCS, or Rich Communications Services, is another alternative. RCS is an IP-based message service and received a boost in awareness after Apple announced that iOS devices will support RCS in 2024. However, it will take at least two or three years for RCS to become mainstream and achieve a broad reach.
According to research house Analysys Mason, “Apple’s adoption of RCS will reduce the use of P2P SMS messaging but should not immediately affect A2P SMS revenue” Other research by Juniper found that in a few years, “An increased number of enterprises are expected to adopt RCS for A2P messaging, with the revenue from RCS traffic expected to reach $21 billion by 2028”.
One is simply cost, and A2P SMS pricing has been going up. High prices and specific commitments demanded by mobile operators have made it difficult for the A2P SMS business to be profitable for the various stakeholders in the ecosystem. It has meant senders are expected to pay higher prices, so they have begun investigating alternative channels.
Furthermore, fraud is fueled by these high prices: 20 billion false messages were sent in 2023, at a cost to brands sending A2P SMS of around €1.1 billion. That’s 5% of all A2P SMS in 2023 were fraudulent – again, forcing sender companies to look elsewhere.
Despite the competition provided by other new messaging techniques and services, SMS still offers many advantages for A2P senders.
A2P SMS remains popular with consumers because it is reliable – they like that it just works and that it isn’t complicated. However, there are things sender companies should remember when selecting an A2P SMS supplier to ensure they meet these consumer expectations. The provider should have:
At Orange Wholesale, we’ve recognized the need for this trustworthiness, and we’ve built a solid solution set for our A2P SMS customers. Among the actions we have taken are:
The telecom industry as a whole is committed to improving trust in A2P SMS, and Orange Wholesale is actively involved in initiatives like the i3Forum’s Fight Messaging Fraud Workgroup. In December 2023, the group created the Messaging Disputes Process Document, which was designed to combat SMS fraud. Another project we are part of is the GLF ITW Global Leaders Forum work group on the “Future of messaging” comprising both telecoms and OTT leaders.
We believe the A2P SMS is still a very relevant proposition for communicating with end-users. According to Juniper Research, a total of 3.4 trillion A2P SMS messages will be delivered in 2028, a growth of 55% from 2024. It’s still the most efficient way of reaching a broad audience in any location worldwide. The major players in the telecom industry have acknowledged that changes must be made to restore trust in this communication medium and are taking decisive actions.
Companies that want reliable, scalable, secure instant communication with end customers should seek a dependable, trusted SMS solution provider and enjoy the benefits.
