These days, fewer and fewer text messages are being sent from person to person. At the same time, the market share of SMS from applications to personal mobile phones (A2P SMS Messaging) and between machines (M2M SMS Messaging) is growing all the time.
In a white paper sponsored by SAP, analysts from the consultancy firm Ovum highlight very nicely the merits of SMS, pointing out that SMS is the only messaging service at the network provider level that can compete with chat apps*. Its omnipresence is its strength. Every mobile phone line—and the number reached almost 7.5 billion in Q1 2016—can send text messages, and this gives SMS a competitive edge despite the growing number of OTT* messaging providers.
Ovum explains that the number of people with texting capabilities and the reliability and security that a telecommunications service provider can offer are two considerations that companies find particularly valuable, especially if they want to improve customer loyalty by adding A2P SMS messaging to their business application portfolio. Marketing, notifications and authentication are all important messaging applications in a business environment. This is equally true for large corporations and for small and medium-sized enterprises (SMEs), which may want to integrate texts into their business processes to schedule appointments, for example.
Increased traffic in M2M and A2P SMS messaging
With the arrival of the Internet of Things (IoT), Ovum expects to see an ecosystem in the low tens of billions of devices and just under one billion M2M mobile connections by 2020. Since all of these networked “things” need to communicate, messaging technologies, including SMS, that are designed to be more cost-effective will become the communication channels of choice. In Ovum’s opinion, both M2M and A2P communication present mobile providers with a host of new challenges (key word: grey routing), but could also open doors to new revenue generators.
Generally speaking, network operators will be faced with the challenge of developing better messaging options while incorporating the strengths of SMS technology. IP messaging, WebRTC and RCS could all be relevant in this context. Unfortunately, from the perspective of the telecommunications industry, it appears there will never be another single standard that is as widely accepted as SMS. After all, texting isn’t dead—in fact, it can be used as the enabling technology for new growth through A2P and the IoT explosion. Its universal reach, reliability and minimal costs make texting an attractive option for companies that want to communicate with all their customers.
A2P SMS services for more efficiency
Some more food for thought: Approximately 90 percent of all SMS text messages are read within the first three minutes of delivery and their opening rate is 98 percent. SMS also works in regions with poor network coverage and does not require a data connection. Lastly, but just as importantly, almost everyone is familiar with texting, which makes communicating with companies much easier.
*These services, which include WhatsApp or Facebook Messenger, send short messages via an internet data connection.