A2P SMS: The opportunity beyond P2P messaging


SMS as a technology has come a long way since its inception in 1992. It’s grown from a service information channel into a major global communication platform, and has inspired the next generation of person-to-person (P2P) messaging. However, while mobile apps like WhatsApp, WeChat and Line have now largely supplanted SMS in terms of P2P communication, application-to-person (A2P) SMS remains the go-to channel for time-critical notifications and acts as a mechanism for online services looking to add extra features like SMS-based two-factor authentication.

This growth in A2P messaging and the rise of SMS rates is happening all across the world, but India has quickly become one of the largest regions in terms of generating this type of messaging traffic.

Silvio Kutic Infobip CEO

This is largely due to how SMS has remained a constant while other mobile messaging technologies have changed significantly over the last decade. The key benefit of SMS is that it’s ubiquitous, meaning a text message can be received on any device, from the latest smartphone to the most basic feature phone. Combine this widespread availability with a low cost of delivery and an exceptionally high read rate (over 98 percent, according to research by Frost & Sullivan) and it’s no surprise A2P SMS has become a highly attractive proposition for businesses of all shapes and sizes – from banks and governmental institutions, to brands and marketers.

For example, in the last few weeks alone, India’s postal service and state railway have announced they will be using SMS alerts to improve customer services.

Growing appetite among businesses and government bodies for professional messaging services is creating new space for innovation in what is now a 22 year-old technology. Specialist companies and messaging providers have emerged over the last decade, and huge investments have been made to improve the performance of A2P SMS.

This change has had a big part to play in how SMS has shifted from a platform to help stay in touch with friends, to a service and transactional channel that can integrate with mobile and web apps, IT systems and banking databases. In a way, SMS has come full circle – the first SMS was sent from a computer, making the first ever text an A2P SMS message.

Where’s the money?

Mobile operators have been affected by the changing use of SMS and have experienced a considerable shift in where this fits into their existing business models. The average consumer is no longer willing to pay for SMS and expects it to be bundled into their monthly line rental. Yet companies are more than willing to pay for access to a professional text messaging technology, representing a significant contribution to the revenues of mobile operators. Ultimately, as a result of A2P SMS, the delivery of text messaging is still a revenue generating service, only the model has irreversibly changed. Users are no longer driving demand; it’s coming from the businesses looking to reach them.

Operators, however, often lack the capabilities to take advantage of this opportunity. Delivering on A2P SMS requires significant resources and expertise that many operators haven’t built over the last few years. This is partly due to the fact that the A2P SMS innovation boom is relatively recent, growing in response to the changing needs of today’s enterprises, which has opened the gates for specialist providers to combine in-house development of features and a global text message delivery network to meet the complex needs of today’s businesses and developers. This includes the knowledge of enterprise IT systems, existing relationships and interconnectivity with operators around the world, and understanding of the types of services enterprises are looking for.

Specialised mobile messaging providers, in particular, have been quick to meet this demand, addressing the requirements of enterprises and helping operators rework their entire businesses – from clients and volume to integration options, back-end processing and billing tools. A2P SMS in this regard has become revolutionary, not only in changing the way mobile operators monetise their resources, but also in how enterprises approach their user base and optimise the interaction between systems and their users.

The widespread potential of A2P

Countless use cases for A2P messaging already exist, but some of the biggest examples fall under marketing, security and emergency services.

SMS will always be a popular communication platform because it’s immediate, easy to use and doesn’t require data connectivity or the latest smartphone to work. Consumers of all ageslove to text, and in many cases prefer SMS over email and other marketing channels for receiving loyalty notifications, discounts, coupons or other perks. This was demonstrated by new research from The Retailers Association of India, which found 95 percent of retailers see mobile as an essential component of their marketing strategy.

Additionally, the reliability of SMS has pushed this technology into the spotlight for online services looking to add an extra layer of security to protect the personal data and accounts of their users. Two-factor authentication helps verify user identity via mobile phones by delivering a one-time PIN as an additional login credential. All the user needs to do is keep their mobile phone with them and enter the pin that’s delivered via SMS into the required field in the app or the online web form.

For global players with large international user bases, including many of those involved in India’s thriving app industry, A2P SMS can also be used to introduce extra security functionality via an API. By working with a mobile messaging provider that has the technical know-how and global delivery capabilities to cater for a worldwide audience, two-factor authentication is just one of the many examples of how SMS can enhance mobile and online segments.

SOS with SMS

Beyond commercial use cases, SMS is also a highly practical tool for emergency services, thanks to its robust features and universal support. Earlier this year India’s Meteorological Department introduced free SMS alerts to farmers to alert them about extreme weather conditions. Sending natural disaster warnings, advice and instructions to the affected population via SMS is a common practice in many parts of the world, and two-way SMS as a method of contacting emergency services is seeing more and more use all across the globe. Millions of people worldwide rely on SMS to receive health advice, weather reports, farming tips and other life-changing information.

The 21st century will be India’s

India is an excellent example of the impact SMS has on people’s daily lives. Widely used by the government for a range of purposes, SMS is also used by virtually all major enterprises in the country for delivering time-critical information, and the monthly SMS volume is topping 9 billion. In total, over 100 billion SMS messages are sent in India each year, even with the rapidly growing penetration of WhatsApp and Viber.

A2P SMS can reach all 6 billion mobile devices on the planet. There are few technologies with that kind of claim to fame, and constant innovation in SMS messaging will continue to play a huge part in making this a reality.

Silvio Kutic, CEO at Infobip

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