SMS the language of 6 billion people

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SMS: the language of 6 billion people Chapter 2. The rise of A2P SMS When it was all about email When email first became available, offering the content and flexibility of sending a hard copy in the post, yet as fast as a fax, without the loss of quality, it seemed the ultimate business communication tool. But then malicious email followed, and suddenly, emails could arrive on your desktop with attachments that could harm your computer if you opened them. And in just a few short years, we have now reached a point where approximately 70 percent of all email sent worldwide is spam. In business, email is still a tool that most of us use every day, but now response times are often measured in days and weeks, not minutes and hours. Email has been saturated, mobbed, hijacked. Commercial spam, and the ceaseless filtering and blocking technologies designed to beat it, have ruined this once world-leading messaging platform. Today, we only trust email from individuals we know, we are all tired of opening endless marketing emails, and we are overwhelmed by marketing messages that, frankly, look like marketing messages. There are lessons to be learned from this story of email. Get personal By contrast to email, SMS is still comparatively spam-free, and so far carriers around the world, in most countries, are doing a great job of keeping high levels of spam out of SMS networks. What sets SMS apart from email, is cost. Broadly speaking, it costs almost nothing to spam millions of people by email, but there is a price attached to spamming people by SMS and, while that price is there, it acts as a barrier to high levels of ineffective and annoying spam. The biggest factor that truly sets SMS apart from email is the device, the fact that SMS delivers to a mobile phone, giving SMS a degree of personalisation that email has never achieved. All around the world, consumers have developed a level of personal attachment to mobile phones that has never been seen before in consumer electronics. This level of attachment has given SMS a deeply personal appeal, and open rates and response rates are amazingly high compared to email and other forms of communications. 16 © 2015, Portio Research. All Rights Reserved
SMS Traffic (In Billion) SMS: the language of 6 billion people Enterprise SMS as a business tool Growth in A2P SMS markets has been booming in recent years. In 2010, A2P represented just 11.7% of total SMS traffic worldwide, at a time when there were 5.25 billion mobile subscribers, sending a total of 6.9 trillion SMS messages annually. In 2015, A2P SMS represents an estimated 22.4% of total SMS traffic worldwide, at a time when there are 7.17 billion mobile subscribers, sending a total of 7.3 trillion SMS mess ages annually. That’s a bigger slice from a bigger pie. In just 5 years, the significance of A2P SMS has roughly doubled. Increasingly, enterprises worldwide are shifting their focus to enabling and optimizing a wide range of services for the mobile platform - mobile banking, mobile payments, mobile health tracking and many more. SMS is being widely utilized as a simple, affordable and accessible way to enable many of these mobile services. Here at Portio Research, we believe that these services are driving the growth of A2P SMS and that growth will continue over the next few years. Figure 2: A2P & P2A SMS Traffic – Worldwide (In Billion, 2011 – 2018F) 2000 1500 1,174 1,315 1,436 1,540 1,625 1,688 1,733 1,762 1000 500 0 2011 2012 2013 2014F 2015F 2016F 2017F 2018F Year Source: Portio Research Ltd. F – Forecasted Over 2012, 2013 and 2014, all around the world in all regions and across most verticals, there has been a very observable uptake in enterprise use of SMS, as a customer service tool, a customer engagement tool, a service delivery function and as an activation and authentication mechanism. The more enterprise SMS services we hear about, the more we are prompted to look into the growing world of A2P SMS use cases. For MNOs, carriers, aggregators, service providers and service enablers, it stands to reason that if an enterprise customer trials SMS within their business, then they find that there are a number of other uses for this technology within the organization. Carriers, service providers, messaging vendors and aggregators can deepen relationships with existing customers in all sectors, building on trust and selling in further SMS-based services to that enterprise. © 2015, Portio Research. All Rights Reserved 17
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SMS the language of 6 billion people

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