A2P SMS Value-Based Pricing Strategies aren’t the only option for telcos

Despite analyst suggestions, A2P SMS value-based pricing strategies aren’t telcos’ only defence against losing A2P messaging market share. SMS doesn’t die, it simply adapts, which is what it can do in the face of mounting threats.

There are conflicting reports about the future of A2P SMS. While OTT players are gaining traction, A2P SMS is surging in some countries.

Recently, Squire Technologies has deployed SMS solutions in North America, the United Kingdom, South Africa, the Solomon Islands, and Switzerland for companies like Telna, Lebara, Intellico, and Our Telekom.

Nevertheless, A2P SMS faces threats from, among other things:

OTT (Over The Top) player channel diversification
Silent Authentication
Rampant fraud

Concerns about the demise of SMS are overblown

Check your phone, and you will likely see that in the last month, you received plenty of A2P SMS notifications.

Those messages are often order and delivery confirmations, appointment and reservation notifications, marketing messages, authentication messages or fraud alerts.

Anxiety about increased A2P SMS prices is unwarranted

In 2025, Vodafone outlined to Ofcom, the UK telecom regulator, that SMS rates have been falling since 2006. Furthermore, Vodafone suggests the increases are short-term, to cover the recent critical network investments of MNOs globally.

In the UK, Vodafone and other operators are voluntarily limiting further price rises till at least 2029. The move supports the assertion that the price rises are short-term.

However, it can’t be denied that other communication channels and substitute technologies are encroaching on A2P SMS. The question is “How much of a threat are they?”.

How much of a threat are A2P messaging platforms to A2P SMS?

OTT platforms like WhatsApp Business are gaining more customers, but SMS isn’t surrendering. Here are some things to consider:

The A2P SMS market has been building for years and will sustain a CAGR of 4% till 2035.
Any cooling down of A2P SMS may be a natural correction after the spike caused by COVID-19
Even with price rises in some countries, globally A2P SMS still provides value for money compared to OTT messaging providers
SMS will remain ubiquitous across mobile devices, while OTT players will compete endlessly for market share.
Network operators continually take steps to curtail SMS fraud, while big tech platforms typically try to fight regulations that might reduce fraud.
The UK’s Ofcom sees A2P SMS as the dominant channel in the medium term, even while OTT players gain market share.

Altogether, this reveals that OTT players are gaining A2P market share, but threats to A2P SMS may be overestimated.

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What can telcos do besides implementing A2P SMS Value-Based Pricing Strategies?

A2P SMS value-based pricing could lower the cost of some types of A2P SMS messages. This might sustain market share and push certain fraud types onto OTT platforms as criminals see their takings drop.

So, what else can telecommunication operators do against the tide of OTT players and other challenges?

Do nothing (relatively speaking)

Grand View Research reports A2P messaging market revenue will have a CAGR of 7% between 2026 and 2033. The growth will be driven by businesses adopting A2P messaging. So, there is plenty of room for A2P SMS to continue developing.

Reduce A2P SMS fraud and inspire trust

Telecom network operators can reduce fraud by deploying solutions like:

SMS firewalls
LCR (Least Cost Routing)
Legal Intercept

These SMS security protection measures can:

Reduce fraud and other crimes
Reduce operating costs
Build trust in SMS.

Embrace regulation to sustain the reputation of SMS

Operators introduced 10 Digit Long Code (10DLC) regulations to manage SMS fraud, improve deliverability and bring down costs. In 2025, 10DLC regulations completely banned unregistered A2P SMS campaigns, dealing a massive blow to SMS fraud.

Greater regulation improves consumer and business trust, and the 10DLC regulations are routinely upgraded.

Expand SMS into M2M IoT markets

The M2M (machine-to-machine) market will likely grow exponentially between 2025 and 2035. This is an opportunity for SMS to expand.

IoT devices operating in remote areas need SMS for reliability, but also for recovery and reconfiguration. If an IoT device malfunctions, SMS allows remote reconfiguration that isn’t possible over a data connection.

Similarly, the energy costs of billions of IoT devices are heavy, and SMS presents a means to reduce energy consumption. IoT devices that enter low-energy modes can’t be woken up via a data connection. In these scenarios, SMS can provide a shoulder tap, waking a device that then establishes a data connection.

Conclusion

While A2P SMS value-based pricing strategies present a way for operators to sustain market share, there are other options. Operators can utilise LCR, fraud detection, SMS firewalls and 10DLC regulations to reduce fraud and costs and inspire trust.

SMS has proven to be highly adaptable, and A2P SMS revenue will continue to increase. Operators can use the ubiquity, simplicity and adaptability of SMS to generate revenue in growth markets like IoT.

“Concerns about the decline of A2P SMS may be overblown and unwarranted.

“OTT platforms have their own problems to overcome. They are experiencing growing fraud, regulation, and competition that prevent them from ever achieving the ubiquity and authority of SMS.

“A2P SMS is still growing and has only declined in some countries, and operators can seek to expand their use of SMS into the growing M2M market.”

Douglas Bryce, Marketing Communications Specialist at Squire Technologies

Find out more about Squire Technologies’ Mirus messaging platform by visiting www.squire-technologies.com/Mirus.

References

https://www.ofcom.org.uk/siteassets/resources/documents/consultations/category-1-10-weeks/review-of-the-a2p-sms-termination-market/main-and-supporting-documents/statement-a2p-sms-termination-non-confidential-decision.pdf?v=407063

https://aws.amazon.com/sns/pricing/

https://www.juniperresearch.com/resources/blog/strategies-a2p-messaging-stakeholders-tackle-fraud/

https://cloudcontactai.com/10dlc-registration-and-regulation-recent-update/

https://mybroadband.co.za/news/broadband/624930-vodacom-and-mtn-want-netflix-and-youtube-to-pay-them-in-south-africa.html

https://economictimes.indiatimes.com/?back=1

https://www.ibanet.org/New-report-from-the-IBA-Communications-Law-Committee-explores-the-fair-share-debate-in-internet-infrastructure-funding

https://www.mobilesquared.co.uk/2025/06/03/perspective-needed-to-establish-sustainable-a2p-sms-marketplace/