Consumers aren’t texting each other like they used to, with chat apps gaining ground. But when it comes to B2C communications, A2P SMS has plenty of room to grow.
Short message service (SMS) started making waves in 1994. By the end of 2000, the average person was sending 35 texts per month. SMS was growing exponentially, but it didn’t last forever.
SMS usage has taken a nosedive in recent years, according to figures from Ofcom. The report shows that messages sent over a cellular network dropped by eight billion in 2015 alone. Meanwhile, over-the-top (OTT) platforms like WhatsApp, Facebook Messenger and China’s WeChat have become messaging sensations with monthly active user bases in excess of 1 billion.
However, businesses are breathing new life into the texting world as they connect to customers with application-to-person (A2P) SMS. In 2017 and the years to come, it looks like there’s still an important use for this more than 20-year-old service.
SMS revamped
A2Ps benefit from looking and acting like traditional SMS messages. That’s because 90% of all SMS text messages are read within three minutes of receiving them and have an open rate of 98%. But what makes them different is their delivery methods and ability to scale.
Thanks to automation, companies can fire off thousands of messages at the click of a button, making SMS the Holy Grail of all communication platforms—as long as they’re used correctly. Here are some ways that customers can benefit from A2P services:
?Courier companies like the UK’s Royal Mail and DPD are using them to arrange convenient drop-off times and to keep customers updated on the status of their packages.
?Food delivery services like Deliveroo or Uber Eats are using A2Ps to confirm the status of food orders.
?Airlines keep passengers alerted when there are flight delays or cancellations.
?Banks notify customers when they are close to an overdraft or if they have insufficient funds for a wire transfer.
Businesses’ enthusiastic adoption of SMS has so much potential that research analysts at Mobilesquared estimate the market for commercial text messaging will be worth $58.75 billion by 2020, and Credence Research believes A2P SMS traffic will exceed 2 trillion messages this year.
A2Ps are also a common fixture in companies’ security protocols because they exist off the grid (as opposed to email or other web-based formats that can be easily hacked).
For this reason, websites with secure customer portals are increasingly using A2Ps to send users with new or suspicious logins a unique code, to help verify their identity. This shows that modern communications rely on many interconnected pathways both on- and offline.
Getting past the negatives
As with many new services (or in this case, a revamp of an existing one), there are barriers to adoption. But steps are already being taken to give A2P SMS plenty of room to grow.
1. Spam, spam, spam
In many respects, A2P’s strengths rest on the sheer volume of messages these applications can send in an instant. However, this also makes A2Ps susceptible to misuse in the form of spam. Keep in mind that there are per-message costs associated with sending SMS in bulk, which is a major deterrent for would-be spammers. These unwanted texts are nonetheless a possible roadblock for A2P messaging as it grows.
Fortunately, mobile operators and CPaaS providers are investing in anti-spam programs and services to stop unwanted messages from tarnishing the A2P market as a whole. As systems and firewalls become more sophisticated, we could see a future where spammy messages are automatically blocked while the useful ones pass through, unhindered.
2. Expensive and scarce
Given the growth potential, applications have the opportunity to eat up mobile phone numbers in huge proportions. Short codes are also separate, with shorter number ranges that have been available throughout the world for the past 15 years. They are widely associated with A2P messaging, albeit at very high costs designed for a revenue-share split of messages between mobile operators and service providers. Yet their costs aren’t sustainable for many businesses, not to mention the numbers are scarce given the limited amount of digits.
Because of the costs, scarcity, and mandates for using short codes, some companies have been getting around the issue by turning to long code foreign numbers, which are in plentiful supply in some countries. They’re also cheaper. However, texts from foreign numbers are generally viewed with suspicion by consumers.
3. Roundabouts
To reduce costs, many providers of A2Ps messaging services use unregulated and unreliable “grey routes” to send important updates to customers. It’s common for these routes to stop working and important messages to go undelivered, especially as mobile operators have become more active in shutting down the segmented pathways that make up these grey routes.
As A2Ps have started to become more mainstream, we can expect an even greater governance to mitigate the risks and regulate the space. Closing down these routes would be beneficial to providers, as it ensures that SMS traffic is properly paid for, and it would also have a positive effect on consumers who would receive less spam.
Full steam ahead
Overall, A2Ps are transforming business communications and improving user experience. As more companies build apps that send messages and alerts via A2P, communicating via SMS will become the norm for business. Lessons will be learned along the way, for both regulators and mobile operators, but with steps to legitimize routes, filter spam, and boost confidence in receiving and even responding to messages sent by companies to their customers, the future looks bright for A2P SMS.