Is there still life for SMS?

LONDON, ENGLAND: While some predict the death of SMS, its reach still makes it a widely used tool. In the last years, there has been a rise in OTT applications (over-the-top content, referring to delivery of media over the internet without the use of an operator, such as Whatsapp), but these require data usage, which is not available in many areas of the world.

On the other hand, SMS has gained an ally in A2P (application-to-person, referring to business messages), as the increasing number of enterprises using SMS for communication and marketing purposes gives the old messaging service a new use.

For the time being, SMS looks set to remain the medium of choice for customer communication for a whole host of businesses, yet the key players can’t ignore the rise of OTT and other messaging applications.

SMS is expected to generate more than $100 billion in 2014, equivalent to 50 times the total revenue from all instant messaging services on mobile phone (MIM). Analysts have predicted that the SMS market will continue to generate significantly greater revenues than MIM until at least 2017, when global SMS revenues are expected to start falling.

An important revenue stream for the SMS industry comes from enterprises. While the OTT market is still fragmented and rarely used for business messaging purposes, over 95 percent of SMSs received are also read. This is why enterprises try to engage with customers and link up with carriers through the SMS channel, giving the messaging world the chance to secure new revenue streams. Some of the industries that are using A2P effectively are banking and finance, transport, health, retail and delivery services.

On 3 & 4 December, members of the entire SMS value chain joined Wholesale Messaging and SMS World in London. As the only conference focusing on the needs and challenges of the wholesale sector, the event brought together global organisations within the SMS and messaging community to debate key trends and markets, as well as highlighted the impact of emerging technologies and new players.

In order to stop the decline in revenues predicted for the future, SMS companies need to connect with enterprises and A2P companies. Perry Offer, CEO of Dialogue Group, a messaging company and the event lead sponsor, says: “SMS is a key mobile service, strengthened by the growing A2P market and is expected to take over P2P (Person-to-Person) revenue by 2015. We look forward to joining the debate to highlight how we can work with wholesale businesses offering on-net connectivity and reach as well as helping MNOs monetise their A2P traffic.”