Future of A2P amidst the burgeoning OTT messaging

Back in the time, when lives were simpler and technology much less complicated, short message service (SMS) enjoyed its undisputed dominance over personal communication. However, change seems to be the only constant in this tech-driven age, and soon with the advent of over the top messaging applications, the kingly status of SMS was disrupted.

While the use of SMS for personal communication had once helped the Mobile Network Operators rake in money, the same is being majorly replaced with OTT messaging services. In the past few years, a number of OTT alternatives have emerged for personal communication. These OTT platforms can be broadly classified into third party applications, such as WhatsApp and Facebook Messenger, and OS-specific apps like iMessage. Regardless of the type, the OTT messaging applications have disrupted the way we keep in touch with our friends and families.

The shift is poised to only get stronger, with the increase in the number of smartphone users and the easy affordability of mobile internet. Given the meteoric rise of the OTT applications, one may halt and wonder the future of the good old SMS dear. As P2P falters, A2P SMS marches on At this point, it is pivotal for us to draw a distinction between personal and business communication. Although OTT apps are taking over the personal texting communication space, driven with lower costs and real-time, interactive features, the same doesn’t translate into a death sentence for the SMS. Even though P2P SMS communication has suffered an onslaught with the rise of OTT, the market has significantly broadened for the utilization of SMS in A2P messaging. In fact, the very same OTT service is contributing to the growth opportunities for A2P SMS, warranting a two-factor authentication, in order to confirm user identities at the time of signups, change in password etc. Moreover, OTT is not the only sector that needs A2P SMS for the validation purposes. SMS presents the most fundamental and easiest means for any business to authenticate the users signing up at their platform.

A wide gamut of sectors would be taking the SMS route for the same purpose. Take for instance the burgeoning online retail sector; it requires A2P SMS for authentication purposes, confirming orders, providing timely notifications, confirming the delivery etc. Additionally, the coming of age of the BFSI sector in India, along with the sprawling FinTech revolution is another solid taker for the A2P services. As per latest figures released by the RBI, digital transactions have crossed 1.11 Bn per month. This further reflects the growth of A2P messages for security and authentication purposes. While the RBI guidelines warrant SMS authentication for secured mobile transactions, the same cannot be delivered on OTT mediums, such as Whatsapp or Messenger. Besides, senior citizens, along with a majority of rural population are more comfortable with SMS, which is generally perceived to be a more authentic. Hence, A2P SMS would continue to play a significant part in ensuring sanctity of user information, as digital transactions continue to rise in India. While that is simply one of the many use cases, the A2P SMS market is growing owing to a number of services that are of consequence in the present tech-driven and digital world. SMS is clearly a winner for the businesses, given its reliability. Even in the absence of no data – one of those wretched days when one is running low on phone’s battery and need to switch off mobile internet, or the data pack expires and the Wi-Fi conks off, or is stuck with really low network coverage, a user would definitely receive the short message from the brand. SMS is further the best bet for any critical, time-bound communication, whether it is alerting a fraudulent activity on an account, or promoting an event or a flash sale that would expire in a few hours.

In fact, businesses are currently exploring new and innovative ways for making the best of the reliability and ubiquitous reach offered by the SMS, utilizing the same for pushing content, sending appointment reminders, managing customer relationships, ensuring the maximum outreach of a promotional campaign, and more. Owing to all the factors, the global A2P market is slated to grow at a CAGR of 4.2% throughout the stretch between 2017 and 2025. The global A2P SMS market volume in 2017 stood at approximately 1,717Bn and is expected to rise to 2,353Bn by 2025. As per the estimates, by 2025, the A2P market is going to be worth USD 86.53Bn. Furthermore, although traditional when compared to its OTT counterparts, SMS is now getting an innovative makeover. Presently, different stakeholders in the ecosystem are investing in making SMSs more interactive; for instance, a ticket template accompanies messages received from IRCTC. Additionally, in times to come, SMS will be able to support attachments, including images, vouchers, brochures, utility bills, reminders, menus and calendars, hence allowing businesses and peers to cover more information, whilst making the same interactive. With the rising stakes for the A2P SMS services, it would be wrong on one’s part to pitch the two: A2P and OTT, against each other. The two have their own set of boundaries and there is enough space in the market for the two to simply co-exist. Catering to a myriad needs for business and personal communication, the upcoming times should be seen as that of collaboration, wherein OTT is one of the many drivers for the growth of A2P SMS service.