It’s true that we’re all fans of our messaging apps, but a new report from Juniper Research has found that revenues from A2P SMS (Application-to-Person – defined as messages which are sent both to and from an application) will be worth almost $60 billion by 2018, up from $55 billion in 2013, which will help fuel the growth of SMS revenues through 2018.
For organisations such as financial services or ticketing providers, the report says SMS is the most secure and reliable option for A2P communications. Almost all handsets can receive SMS. However OTT messaging platforms frequently do not interoperate, and there are still a significant number of people without data plans, which keeps A2P at bay for many.
However the growth in A2P SMS revenues comes at the same time as P2P (person-to-person) SMS revenues are in decline. Mobile operators are losing out as their customers switch to OTT messaging platforms which have the allure of ‘free’. MNO’s have reacted by aggressively bundling messaging into cheaper deals for users, squeezing their messaging ARPU and, subsequently, total revenues (though we’ve also seen some operators attempt to ban the apps to slow the inevitable growth).
However, growth of apps will continue. By 2018, IM (Instant Messaging) traffic will stand at 63 trillion messages, but only account for just over $3 billion in revenues. Far East & China will generate the most traffic across all mobile messaging formats, which could signify the popularity growth of apps like LINE, Nimbuzz, and KakaoTalk in these regions.