A2P messaging to continue growing over the next 5 years
Updated: Jun 17, 2019
According to a recent study by Juniper Research, 3.5 trillion business A2P (Application-to-Person) messages will be delivered by 2023, up from an estimated 2.5 trillion in 2019, a 40% growth.
The study A2P Messaging: SMS, RCS & OTT Business Messaging 2019-2023, forecasts that the rich media interactivity of RCS (Rich Communications Suite, also referred to as SMS 2.0) would make the emerging messaging technology popular for retail and marketing business use cases. It claims that this enhanced functionality will drive RCS traffic to an average annual growth of 290% over the next 4 years, and help the growth of operators’ total messaging revenues.
RCS to account for 2% of all A2P traffic by 2023
Despite strong growth, RCS will account for only 2% of all A2P traffic by 2023, the analyst company estimates. What does this mean for brands, advertisers and digital companies that rely on A2P messaging for customer communication, authentication and digital experience improvement?
Juniper research suggests that A2P messaging users will continue to use A2P SMS owing to the familiarity of the protocol. However, there are other advantages that A2P SMS has amassed. The technology is scalable and well supported for any type of enterprise use, with many integration and performance challenges solved over the past decade. Interoperability seems to be key to its longevity as well.
There is an established ecosystem around A2P SMS, there are tools and processes for fast enterprise onboarding and business relationships already in place. A2P SMS is one of the rare vehicles to reach almost any mobile phone on Earth, whereas RCS and OTT messaging options still struggle with reaching such level of ubiquity in the A2P space.
There was expectation that RCS could make a breakthrough at this year’s Mobile World Congress, and that we could see signs of adoption accelerating. Indeed, there were a number of MNO launches, and messaging companies presented outstanding use cases and trials, many of them in partnership with Google. RCS was a topic of considerable interest among industry analysts and trade associations as well. Yet, massive adoption and a sudden increases in number of active users was not seen.
Read more: RCS to go big at MWC19?
Juniper Research expects that the growth of RCS will be mostly driven by new traffic, rather than the migration of existing traffic from SMS.
Future growth of RCS traffic will be driven by users migrating away from dedicated mobile apps. The technology will develop to become the first point of contact for RCS users to engage with brands over mobile devices within 5 years, said research author Sam Barker.
Can OTT players overcome fragmentation? CPaaS could be the answer
The research also found that OTT business messaging platforms, such as WhatsApp for Business, will deliver 236 billion messages by 2023. However, they will continue to suffer from a fragmented user base across multiple messaging applications.
Enterprises see an opportunity to design their communications and business processes to the taste of a modern, digital-oriented consumer by making their brands available on WhatsApp, Viber and other messaging apps. Communication platforms such as Infobip are leading the way in enabling this.
As banking, travel, transportation, healthcare and other verticals are transforming their communications to achieve better customer centricity and user experience, demand is also created for services such as A2P OTT, A2P RCS, omnichannel communications. With A2P OTT, there are some barriers to faster adoption by enterprises. We are able to draw on our global experience in enabling different enterprise verticals for A2P SMS, and help our OTT partners navigate enterprise environments and business messaging requirements, the company says.
Juniper’s study cited the use of CPaaS (Communications-Platform-as-a-Service) solutions as essential to enable fallback onto the ubiquitous SMS protocol to ensure message termination. Additionally, it found these platforms will allow the collection of insightful data, including contact preferences, to enable A2P business users to optimize messaging campaigns.