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SMS is Here to Stay and 5G isn’t Going to Change That

As with all major technology advancements there’s plenty of debate and prophecy on how it’s likely to impact existing tech and bring about the demise of old ways, none-more-so than with 5G. Various commentators and presentations during events (when we were freely attending them) have promoted that the messaging standard for 5G is RCS and that SMS days are numbered.

Well in fact on two fronts SMS is more alive and kicking now more than ever before, and ironically the Covid-19 pandemic has supercharged it. Technically speaking SMS is fully supported by the 5G standards and will remain a vital delivery channel throughout this decade and beyond, with impressive growth predicted for A2P SMS in the coming years.

The Covid Effect

The global pandemic accelerated the adoption of digital technologies all over the world as businesses brought-forward digital transformation and increased investment in digital solutions in response to Covid-19 lockdowns. The need for more effective communication channels during the pandemic has driven the demand in enterprise A2P SMS.

Ironically during the pandemic governments and health care providers played their part in fortuitously promoting SMS as the pre-eminent communications channel, having partnered with operators to deploy public health and safety messages via SMS. This has helped to instil a high degree of trust in the medium and almost certainly influenced investment decisions by business leaders.

Pre-pandemic SMS grew by 10% between 2019 and 2020 according to Juniper Research with brands using text messaging for marketing, customer support, transactional messages and more. As the pandemic began in early 2020 cloud communications provider Infobip recorded an 8.5% and 20% growth in SMS marketing during March and April 2020, respectively, compared with February.

An Anchor for Digital Communications…

The ubiquity of SMS messaging is of course what separates it from other mobile communication channels and continues to make it an anchor for digital comms. Its ubiquity gives rise to some incredible statistics; nine in ten people open their text messages, 60% reading them within five minutes and millennials within 90 seconds of receiving them. With global smartphone users set to reach 7.5 billion by 2026 and consumers showing a preference for communications built into their smartphones as opposed to having to download apps, the future is pretty good for SMS.

Enterprise A2P SMS set for Record Growth

SMS remains remarkably resilient in the face of pressure from newer shinier tech. It maintains the highest engagement rates, compared to things like OTT apps and emails, delivers favourable conversion rates at very low costs in comparison to email where open and response rates have consistently declined year-on-year, and continues to evolve in ways that serve up new revenue generating opportunities for businesses and mobile carriers. All this has encouraged SMEs and start-ups to increasingly adopt A2P SMS services to generate leads, boost revenue and help cultivate better customer relationships across a wide variety of industries, including banking, financial services, and insurance (BFSI), ecommerce, healthcare and food delivery.

Growth for A2P SMS is being seen all over the place, Two-Factor Authentication (2FA) and One-Time Passcodes (OTP) to enhance online security is increasingly common, a surge in the use of delivery apps such as Just Eat, Deliveroo and UberEATS, new mobile health services driven by lockdown restrictions, P2P SMS payments, widely used in countries where people have little or no access to banking facilities is projected to grow at a CAGR of 17.3% from 2021 to 2030, estimated to be worth over $9 billion by 2030 and adding its weight to the growth in A2P SMS.

Further growth in recent years has come from voting-based reality TV shows, and from political campaigning. By some estimates a billion SMS text messages were sent during the latest US Presidential Election campaign cycle.

With the cloud-based communications market increasing and enterprise platforms integrating SMS and other services to provide secure mobile messaging experiences to customers CSP’s continue to consider SMS as a high priority. According to Fortune Business Insights enterprise A2P SMS is expected to rise by an impressive 4.6% CAGR over the next seven years, with revenue increasing from $46.81 billion in 2021 to $64.24 billion in 2028.

The first SMS was sent thirty years ago in 1992, it would be a brave soul to predict when the last ‘txt’ might be sent.

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Messaging Platform

With the continuing growth of A2P SMS traffic the SVI-SMSC offers not only an out-of-the-box, feature rich, carrier grade solution, but with innovative service logic technology it allows clients to rapidly provision new revenue generating value added services.