SMS is one of the most attractive and easy to use forms of mobile communication since majority users are familiar with it. Application-to-person (A2P) SMS is a type of SMS sent from an application, particularly a web application, to a mobile subscriber. A2P SMS is used for applications such as pushed content services, interactive services, customer relationship management (CRM) services, promotional campaigns and others search and inquiry related services. Pushed content services are primarily used to provide updates such as news and heath tips to the subscribed users.
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A2P SMS are currently used across major industry verticals including banking, financial services and insurance (BFSI), entertainment, tourism, retail, marketing, healthcare and media. Interactive services are used for applications such as voting in contests and charity donations by establishing communication between the server and the user through the SMS platform. CRM services are used to offer billing and transaction-related information to the customers. Promotional campaign services promote a brand or offering by a business organization through SMS. The inquiry and search-related services (considered under other applications) include the SMS-enabled services which the user initiates to get desired information such as contact details and address for a particular retail outlet.
Growth in mobile payments and mobile banking, and increasing mobile marketing activities are driving the growth of A2P SMS market. Additionally, technological innovations and development of new SMS platform tools with integrated application programming interface (APIs) are further expected to fuel the market growth during the forecast period. SMS is supported by all the mobile handsets across all operating systems and mobile networks. With increase in transactional activities along with the increase in mobile subscriber base, the facilities such as, post transaction notifications and one time password (OTP) are expected to continue to propel the market growth in the long term.
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A2P messages are convenient and easy to use with the introduction of advanced platforms integrated with APIs and messaging gateways. These platforms and gateways simplify the process of sending A2P SMS. The global A2P SMS market was valued at USD 53.07 billion in 2013 and is expected to grow at a CAGR of 4.2% during the forecast period – 2014 to 2020. Enhancement in end-user experience and provision of a secure and reliable operator channel are the basic factors responsible for growth of this market.
The customer relationship management services (CRM) was the largest application segment in 2013. The global market for CRM services is forecast to reach USD 23.52 billion by 2020, recording a CAGR of 4.9% from 2014 – 2020. This growth is primarily driven by growth in the ecommerce and BFSI industry. The messages sent for authentication purposes such as OTPs (One Time Password) and confirmation messages for delivering any service or product across online retail trading is propelling the market growth. Promotional campaign service was one of the largest valued application segments in 2013. The growth is attributed to increase in promotional campaigns by enterprises and business globally to increase its customer base.
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Asia Pacific was the largest market for A2P SMS and held 42.2% share of the total A2P SMS market in 2013. The growth is primarily attributed to potential opportunities available for advertisers in Asia Pacific and Rest of the World (RoW), given the high concentration of feature phones/basic mobile phones in these regions. Moreover, several multinational companies are focusing on expanding their business in countries across Asia Pacific and RoW. This offers potential growth opportunities for A2P SMS providers to increase brand awareness of the business organizations.
The global A2P SMS market is highly fragmented with various players such as SMS aggregators, bulk SMS providers, SMS gateway providers, marketers or resellers and telecom operators contributing to the market revenue. Currently, telecom operators along with the marketers and other stakeholders account for major share of the A2P SMS market. The telecom operators provide SMS in high volume to SMS aggregators. Leading messaging platform and gateway providers including Syniverse Technologies LLC., AMD Telecom S.A., FortyTwo Telecom AB, mBlox, Inc., Ogangi Corporation, Silverstreet BV, Tanla Solutions Ltd. and Symsoft AB together account for 1.01% of the total A2P SMS market. In order to sustain the competition, the companies are expected to offer innovative messaging gateways solutions with advanced APIs that integrate with the third party software application.