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Enterprise A2P SMS Market Is Expected to exhibit a CAGR of 6.0% During the Forecast period (2019-2027)

Enterprise A2P SMS Market Is Expected to exhibit a CAGR of 6.0% During the Forecast period (2019-2027) - Coherent Market Insights

Publish In: Jan 03, 2020

Enterprise A2P SMS Market

Overview

SMS is a universal technique of reaching everyone using basic feature phone. Application-to-person (A2P) SMS is a type of SMS service sent from an application, mainly web application to a mobile subscriber. A2P SMS service finds applications in various industries such as tourism, ecommerce, entertainment, healthcare, and financial institution.

Pushed Content Services

In this, A2P SMS is sent for requested content/updates or information to users.

Interactive Services 

In this segment, A2P SMS is sent for acknowledgment to the end user during voting contest, polls, charity donations, and TV shows.

CFM Service

This segment includes all transactions A2P SMS from banking and financial institutions and associated services such as one-time password.

Promotional Campaigns

This segment is typically used for advertising and promotional campaign for brands, products, and events.

Others

This segment includes A2P SMS for inquiry and search related services such as address list, phone number inquiries, and price search services. 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 Market Driver Growing adoption of desktop-fist to mobile-first strategy is expected to drive the global enterprise A2P SMS market growth during the forecast period Enterprises in the industry are leveraging mobile platforms for consumer and marketing service operations. Mobile is the most personalized way of connecting with consumers wherein enterprises are allocating additional budget for in-mobile centric activities as compared to traditional television advertising or web-based endorsement.  According to surveys conducted by various IT companies such as CA Technologies and Oracle Corporation, average expenditure on mobility as part of overall IT expenditure is expected to increase by over 50% in the near future.

Market Opportunity 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.

Market Restraint Increasing use of illicit routes to send SMS is expected to restrain the global enterprise A2P SMS market during the forecast period As adoption of A2P SMS services has increased, there has been rise in messages being sent through illegitimate routes also known as grey routes. Such routes evade the billing systems of operators, leading substantial loss in revenue. Enterprise have to increase price per SMS, which is discouraging enterprise expenditure on A2P SMS. According to Groupe Speciale Mobile Association (GSMA), international spam messages being delivered without payment can result in loss of over US$ 4 million per year for mobile network operator with around 16 million subscribers.

Key Takeaways

  1. Among traffic, the National segment held a dominant position in 2018, and is projected to retain its dominance throughout the forecast period.
  2. Among geography, the Asia Pacific enterprise A2P SMS market held a dominant position in 2018, and is projected to retain its dominance throughout the forecast period owing to strategic collaborations and innovations by market players. For instance, in November 2017, Infobip Limited, one of the international IT and telecommunications company, announced the provision of four billion A2P SMS messages on a monthly basis across India, which accounting for almost 30% of all A2P SMS traffic in the Asia Pacific region. In 2018, the market in Asia Pacific generated revenue of US$ 11,410.1 Million, with 39.38% market share. India, China, and Japan are some of the major countries that drive rapid growth of this market in Asia Pacific.

Market Trends

  1. Japan Trends

According to GSMA, by the end of 2014, Japan’s mobile penetration rate was 92% and is expected to grow gradually. The subscriber growth rate remains timid, though revenue from A2P SMS is expected to show promising signs during the forecast period Presence of various OTT players such as WeChat, WhatsApp, Line, and more have adversely impacted P2P messaging revenue. However, these platforms have opened a new avenue for enterprise A2P SMS market in the form of APIs in the region.

  1. Eastern Europe Trends

Key countries holding dominant position in the Eastern Europe enterprise A2P SMS market are Czech Republic, Poland, and Russia. These countries are witness steady growth in subscriber count and are expected to retain positive market prospects during the forecast period. According to ’ analysis, in 2014, the mobile phone penetration across Poland and Russia was 69.5% and 72.9% respectively. This rate is expected to grow further along with increasing penetration of ecommerce industry. Moreover, promotional campaign application of the enterprise A2P SMS market in Eastern Europe is expected to expand at a CAGR of 6.0% over the forecast period.

Regulations APEJ

  1. In May 2015, China’s Ministry of Industry and Information Technology (MIIT) released measures to implement provisions related to SMS marketing in the previously enforced laws. This newly promulgated regulations entitled ‘Administrative Rules for Short Message Service’ further clarified the SMS marketing requirements for organizations and mandated fines up to US$ 4,800 on non-compliance.
  2. In 2007, Telecom Regulatory Authority of India (TRAI) implemented National Customer Preference Register (NCPR), which allows subscribers to block all kinds of promotional message delivery on their handset. Furthermore, TRAI has regulated law that allows promotional A2P SMS delivery only between 9am to 9pm.

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.

Key Developments

  1. Key companies in the market are focused on mergers and acquisitions, in order to gain competitive edge in the market. For instance, in July 2016, CLX Communications acquired Mblox Inc.
  2. Key players in the market are involved entering into contracts, in order to enhance market presence. For instance, in February 2016, Infobip Limited entered into a two-year contract from Aircel Ltd. to set up and manage A2P SMS platform of Aircel Ltd. As per this contract, Infobip Limited is managing Aircel’s end-to-end operations in the A2P messaging space, including handling customers to offering technical assistance.

Segmentation

Market Taxonomy:

  1. By Regions
  • North America
  • Latin America
  • APEJ
  • Japan
  • Eastern Europe
  • Western Europe
  • MEA
  1. By Traffic
  • National
  • Multi-country
  1. By Tools
  • Cloud API Messaging Platform
  • Traditional and Managed Messaging Services
  1. 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)
  1. By Vertical
  • Financial institutions and Banking
  • Gaming
  • Travel and Transport
  • Health and Hospitality
  • Retail
  • Others

 

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