Enterprise A2P SMS Market Analysis and Forecast 2020: By Keyplayers Infobip Limited, OpenMarket Inc., AMD Telecom S.A., Syniverse Holdings Inc., FortyTwo Telecom AB, Twilio Inc., Mblox Inc., Nexmo Inc., and CLX Communications AB.

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Market Overview

SMS is a discreet and universal technique of reaching everyone with the help of basic feature phone without an additional access to data services. Application-to-person (A2P) SMS is a type an SMS service that is sent from an application, mainly a web application to mobile users. A2P SMS service is primarily used for alerts, marketing messages, notifications, and flight alerts. SMS can reach any global network and is centrally invoiced, therefore it is the one of the most preferred content delivery mediums. SMS can also be sent from mobile user to web applications, which in case, called person-to-application (P2A) messaging. A2P SMS services find applications in various industry verticals including ecommerce, banking and financial institutions, tourism, healthcare, entertainment, etc.

The global enterprise A2P SMS market is estimated to account for US$ 30,687.8 Mn in terms of value by the end of 2019

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Competitive Section

Key players operating in the global enterprise A2P SMS market are Infobip Limited, OpenMarket Inc., AMD Telecom S.A., Syniverse Holdings Inc., FortyTwo Telecom AB, Twilio Inc., Mblox Inc., Nexmo Inc., and CLX Communications AB.

Market Dynamics- Drivers

1. Increasing mobile subscriber base around the world is expected to drive the global enterprise A2P SMS market growth during the forecast period
SMS stands as a discreet technique for reaching people using basic mobile handsets without the use of an additional access to data services. Penetration of mobile phones in emerging economies such as Latin America, Asia Pacific, Africa, and the Middle East is expected to grow at rapid pace in the near future. According to Groupe Spciale Mobile Association (GSMA) Intelligence, the unique mobile subscriber base was 3.6 billion in 2014 and is expected to reach 4.6 billion by 2020. This, in turn, is expected to drive the market growth over the forecast period.

2. Growing focus on enhancing consumer interaction is expected to propel the global enterprise A2P SMS market growth over the forecast period

A2P SMS service is widely preferred by numerous enterprises including healthcare, hospitality, travel and transport, retail shops, ecommerce, and financial institutions. These enterprises use A2P SMS service as a grid lock solution to native mobile apps, in order to improve customer interaction. Moreover, enterprises are using cloud APIs with embedded contextual communications for applications such as field service software and CRMs. For instance, Gett Inc., an Israel-based company, utilizes Nexmo’s cloud API, a messaging platform, to register its users and status updates on pending services across 60 cities around the world.

Asia Pacific region dominated the global enterprise A2P SMS market in 2018, accounting for 39.38% share in terms of value, followed by North America and Europe, respectively

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Market Opportunities

1. Emergence cloud API messaging is expected to offer lucrative growth opportunities for market players

Cloud API messaging is a mobile notification service where third party application developers send notification data or information from a developer-run servers to applications. It is a sophisticated manner of sending messages for advertising and alerts, which in turn, is expected to offer lucrative growth opportunities for market players in the near future.

Segment Information:

Global enterprise A2P SMS market was valued US$ 28,974.7 Mn in 2018 and is forecast to reach a value of US$ 49,724.2 Mn by 2027 at a CAGR of 6.0% between 2019 and 2027. In global enterprise A2P SMS market, by traffic segment National sub-segment dominated the global enterprise A2P SMS market in 2018, accounting for 86.12% share in terms of value, followed by Multi-country sub-segments.

Market Trends

1. Integration of numerous technologies via hybrid cloud-based messaging platforms is a major trend in the market

Messaging solution providers in this market offer multi-channel cloud-based mobile marketing platforms, in order to create push messaging and SMS campaigns. With this market players can send messages virtually to each mobile device using push notifications, email, SMS, IP messaging, outbound dialing and social media channels. These solutions offer increased scalability to marketers. Companies offering these solutions include Vibes, Fastsms (A Division Of NetSecrets Ltd), mGage, LLC and Mblox, Inc.

2. Implementation of SMS Firewall
A2P SMS industry rapidly shifting from traditional low-cost routing channels to quality message routes, in order to reach target consumers and higher traffic margin. This, in turn, has increased implementation of SMS firewalls by mobile operators intended to block non-compliant and unauthorized traffic. Such systems are encouraging enterprises to use A2P SMS across various business divisions.

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Regulations

North America

• In December 2013, AT&T Inc., Sprint Corporation, and T-Mobile International AG entered into agreement with 45 states to discontinue premium SMS billion, in order to end unsolicited third-party charges on mobile bill. Verizon wireless also supported this discontinuation.

• In July 2014, Parliament of Canada’s Anti-Spam Law (CASL) was enforced on bulk SMS providers for three-year translational period. This law implies to receive consent from recipients (before sending messages) for organizations that send any Commercial Electronic Message (CEM), including instant messages and text messages in Canada.

SMS Aggregators

SMS aggregators (tier-1 aggregators) purchase SMS in large volumes from telecom operators (Mobile Network Operators (MNOs)) and utilise the latter’s network infrastructure to offer A2P SMS services to marketers, enterprises or bulk SMS service providers (tier-2 aggregators). SMS aggregators (tier-1 aggregators) have direct connection with global MNOs in order to leverage their high quality and reliable routes.

Marketers and Resellers

Marketers (also known as resellers in Asia Pacific) offer bulk messaging services globally. They offer messaging services to businesses of all sizes from multinational corporations to small and medium enterprises (SMEs) across all industry sectors. This enables every society or community group or business group to instantaneously reach everyone. A marketer, who deals with huge volume of SMS, also designs messaging platforms to deliver promotional messages.

Application Developer

Application developers design and develop their own software applications. Application developers partner with gateway providers offering gateway solution or short message service center (SMSC) with in-built APIs to integrate their software applications with messaging platforms. Recently, application developers have been partnering with or acquiring aggregators in order to develop their own messaging platforms having enterprise messaging capabilities.

Cloud API messaging platform provider
The era of cloud communication has ushered as numerous companies adopting API-based approach to cater to A2P SMS service requirement by enterprises. Such companies collaborate with MNOs or SMS aggregators (tier-1 aggregators) to provide cloud-based communication platform for enterprises.

Mobile Network Operators

MNOs can sell bulk SMS directly to marketers who worked for enterprises, but it is not economically viable for the marketers or the MNO either as the amount of A2P SMS traffic is too less. Aggregators play an intermediary role, which enables MNOs to deal with fewer customers and enterprises to purchase SMS at much lower cost.

Detailed Segmentation:
• Global enterprise A2P SMS Market, By Traffic:
◦ National
◦ Multi-country
• Global enterprise A2P SMS Market, By Tools:
◦ Cloud API Messaging Platform
◦ Traditional and Managed Messaging Services

• Global enterprise A2P SMS Market, By Applications:
◦ Pushed Content Services
◦ Interactive Services
◦ Promotional Campaigns
◦ Customer relationship management (CRM) services
▪ Two factor authentication (includes OTP)
▪ Others (includes product shipment SMS and others)
◦ Others (Inquiry and search related services)

• Global enterprise A2P SMS Market, By Vertical:
◦ Financial institutions and Banking
◦ Gaming
◦ Travel and Transport
◦ Health and Hospitality
◦ Retail
◦ Others

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