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The market dynamics of A2P (Application-to-Person) messaging showcase a landscape influenced by several factors driving its growth and evolution. A2P messaging refers to the transmission of messages from an application to an individual, typically facilitated by an automated system. One of the primary drivers shaping this market is the increasing integration of mobile technology into various industries. As businesses seek to engage with customers more directly and efficiently, A2P messaging offers a convenient solution for delivering important notifications, alerts, and promotional messages. This demand is further fueled by the growing reliance on mobile devices for communication and commerce, making A2P messaging an indispensable tool for businesses to reach their target audience.
Moreover, the expanding scope of A2P messaging applications across diverse sectors such as banking, healthcare, retail, and travel contributes significantly to market growth. Organizations recognize the value of leveraging A2P messaging to enhance customer engagement, streamline operations, and drive revenue. For instance, banks utilize A2P messaging for delivering transaction alerts, account updates, and authentication codes, enhancing security and customer experience simultaneously. Similarly, healthcare providers employ A2P messaging for appointment reminders, medication adherence, and health education, fostering patient engagement and improving health outcomes.
Additionally, technological advancements play a pivotal role in shaping the dynamics of the A2P messaging market. Innovations such as artificial intelligence, machine learning, and chatbots are increasingly integrated into A2P messaging platforms to personalize interactions, automate responses, and optimize message delivery. These advancements not only enhance the efficiency and effectiveness of A2P messaging but also open up new opportunities for businesses to innovate and differentiate their services in a competitive landscape.
Furthermore, regulatory compliance and data privacy considerations exert a significant influence on the market dynamics of A2P messaging. With stringent regulations governing the use of personal data and communication channels, businesses are required to adhere to strict compliance standards to ensure the lawful and ethical use of A2P messaging services. Compliance with regulations such as GDPR (General Data Protection Regulation) and TCPA (Telephone Consumer Protection Act) is essential for maintaining trust and mitigating legal risks, thereby shaping the market dynamics in terms of transparency, accountability, and consumer protection.
Moreover, the competitive landscape of the A2P messaging market is characterized by the presence of numerous players offering a wide range of solutions and services. From established telecommunications companies to specialized A2P messaging providers and emerging startups, competition is intense, driving innovation and driving down costs. As businesses seek cost-effective and reliable A2P messaging solutions, providers are compelled to differentiate themselves through features such as delivery speed, message reliability, scalability, and customer support.
Covered Aspects:
| Report Attribute/Metric | Details |
|---|---|
| Market Size Value In 2022 | USD 68.0 Billion |
| Growth Rate | 3.80% (2022-2030) |
A2P SMS Market Highlights:
A2P Messaging Market Overview
A2P Messaging Market Size was valued at USD 65.5 billion in 2021.
The A2P messaging market industry is projected to grow from USD 68.0 Billion in 2022 to USD 88.3 billion by 2030, exhibiting a compound annual growth rate (CAGR) of 3.80% during the forecast period (2024 - 2030). Due to the high use of short messaging services (SMS) among enterprises and the low cost and universal reach of A2P messaging, the market is expected to grow significantly. Furthermore, a high emphasis on customer acquisition and engagement is expected to boost the A2P messaging market.
Figure 1: A2P Messaging Market Size, 2022-2030 (USD Billion)
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
A2P Messaging Market Trends
Increase in mobile subscribers to boost the A2P messaging market growth
Customers and service providers have used SMS as a communication channel for years. SMS is an omnipresent method of communicating with people using basic mobile handsets without access to additional data services, even though other communication methods, such as phone calls (voice) and emails, are available. In the report Mobile Economy 2022, subscribers continue to grow as mobiles contribute to the economy. By the end of 2021, nearly 5.3 billion people will have subscribed to mobile services, representing 67% of the population. As many adults own and operate mobile phones, the younger population largely determines the A2P messaging market's future growth.
It is expected that 400 million new mobile subscribers will be added by 2025, bringing the total number of subscribers to 5.7 billion (70 percent of the population). As of 2021, mobile technologies and services are expected to generate over US$ 4.5 trillion, accounting for 5% of GDP. Revenues will increase by over US$ 400 billion by 2025. As a result of increased efficiency and productivity and increased adoption of mobile services, the value increased to US$ 5 trillion.
A company may need to negotiate individually with each operator to roll out a service, or it may need to work with various aggregators. Some message exchange providers are highly experienced in managing SMS traffic and blocking spammers from reaching mobile subscribers thanks to their inbuilt high-quality (SS7) direct interconnections and high-quality Signaling System (SS7) direct interconnections. Messaging exchange providers provide operators with a one-stop billing and support experience and guaranteed mobile messaging excellence. Therefore, increasing mobile subscribers has enhanced the A2P messaging market CAGR ly in recent years. A2P SMS services are changing the global SMS and sms industry by enabling companies to send application-to-person SMS messages at scale. SMS A2P messaging provides businesses with the ability to send notifications, alerts, and other information via SMS to their customers in a convenient and cost-effective way.
However, there is a growing adoption of A2P messaging in several industries, such as BFSI, healthcare, retail & e-commerce, which contributes positively to the growth of the A2P messaging industry. This is another factor driving the growth of the A2P Messaging market revenue.
A2P Messaging Market Segment Insights
A2P Messaging Service Type Insights
The A2P messaging market segmentation, based on service type, includes transactional services (unstructured supplementary service data (USSD), one-time password (OTP) interactive services, and two-factor authentication (2FA). The one-time password (OTP) interactive services segment held the majority share in 2021, contributing to around ~41%-43% of the A2P messaging market revenue. In order to provide services that are reliable, timely, and, most importantly, not prone to data leaks, service providers need carrier-grade delivery technology; this is where carrier-grade messaging stands out. Due to SMS's ubiquitous nature, consumers could receive the services irrespective of their geographical location. In order to provide consumers with holistic and high-quality services, A2P SMS operators and Over-The-Top (OTT) players could work together.
Figure 2: A2P Messaging Market, by Service Type, 2021 & 2030 (USD Billion)
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
A2P Messaging Vertical Insights
The A2P messaging market data has been bifurcated vertical into BFSI, media & amp, entertainment, healthcare, education & amp, research, retail and e-commerce, government, utilities & amp, logistics, it & amp and telecommunications. The BFSI segment dominated the A2P messaging market in 2021 and is projected to be the faster-growing segment during the forecast period, 2022-2030. In the BFSI industry, online A2P messaging is being adopted at an increasing rate as payment transactions increase. As part of payment reminders, balance statements, notifications, one-time passwords, and anti-fraud alerts, financial institutions and banks use A2P messaging. Using an A2P messaging system, banks can announce transaction updates, consumer actions, and retail operations to their customers in order to build a strong relationship with them.
It is expected that the media & entertainment segment will grow at the fastest rate during the forecast period because of the adoption of A2P messaging by the entertainment industry involving voting-based reality shows. To drive engagement with instant media alerts, companies such as Sinch and Proximus provide content distribution solutions that enhance messages with rich content and provide personalized and newsworthy notifications to drive engagement.
A2P Messaging Regional Insights
By Region, the study provides A2P messaging market insights into North America, Europe, Asia-Pacific and Rest of the World. The Asia-Pacific A2P messaging market accounted for USD 28.6 billion in 2021 and is expected to exhibit a significant CAGR growth during the study period. Increasing smartphone penetration, the proliferation of internet services, and the number of internet subscribers in the region all plays a role in the growth. China and India have a large customer base that drives demand and creates new opportunities for A2P businesses.
Further, the major countries studied in the A2P messaging market report are: The U.S, Canada, Germany, France, UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.
Figure 3: A2P MESSAGING MARKET SHARE BY REGION 2021 (%)
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
The North American A2P Messaging market accounts for the second-largest market share. It has been largely driven by the presence of large players in the A2P industry, including AT&T, Genesys, and TWILIO INC., which has accelerated the sector's growth. In addition, a number of companies are developing cloud-based messaging platforms for end-to-end encryption of messages, thereby contributing to the growth of the A2P market. Further, the US A2P Messaging market held the largest market share, and the Canadian A2P Messaging market was the fastest-growing market in the North American region
Europe’s A2P messaging market is expected to grow at the fastest CAGR from 2022 to 2030. This is because the market's technological advancements and software developments will attract new end users. Moreover, the German A2P messaging market held the largest market share, and the UK A2P Messaging market was the fastest-growing A2P messaging market in the European region
A2P Messaging Key Market Players & Competitive Insights
Major market players are spending on R&D to increase their product lines, which will help the A2P messaging market grow even more. Leading players are also taking various strategic initiatives to grow their worldwide presence, with key market developments such as contractual agreements, mergers and acquisitions, new product launches, increased investments, and collaboration with other organizations. Competitors in the A2P messaging industry increasingly competitive and rising market conditions require cost-effective products to expand and survive.
In the A2P messaging industry marketplace, manufacturers adopt a variety of business strategies to benefit clients and expand the market sector is manufacturing locally to reduce operating costs. In recent years, the A2P messaging industry has provided medicine with some of the most significant benefits. The A2P messaging major market players such as Bharti Airtel Limited (India), China Unicom (Hong Kong) Limited, Tata Communications Limited (India), Sap Se (Germany), and research and development activities are being undertaken by others in order to expand the market demand.
As a telecommunications company, Tata Communications Limited provides international telephone, telex, and telegraphy services, international maritime mobile communications, INTELSAT business services, bureau faxes, and t-faxes. In addition to providing internet access, electronic mail, and electronic data interchange, Tata Communications provides services related to international maritime mobile communication.
Also, The SAP SE multinational software company develops enterprise management and e-business software, provides consulting services on the organization's use of its application software, and provides training services. It markets its products and services worldwide. The SAP SE company is one of the world's leading providers of enterprise resource planning software, with its headquarters in Walldorf, Baden-Württemberg. SAP develops enterprise software to manage business operations and customer relations.
Key Companies in the A2P Messaging market include
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Bharti Airtel Limited (India)
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China Unicom (Hong Kong) Limited
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SAP SE (Germany)
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Tata Communications Limited (India)
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Vodafone Group Plc. (UK)
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Orange Business Services (France)
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Monty Mobile (UK)
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ARPUPLUS (Giza)
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Clickatell (US)
A2P Messaging Industry Developments
June 2023: The phrase "artificially inflated traffic" (AIT) refers to the fraudulent transmission of Application to Person (A2P) messages in order for rogue mobile network operators (MNOs) or another rogue participant in the value chain, such as an SMS aggregator, to profit from the increased traffic. Often, the unknowing business ends up bearing the price.
With A2P two factor authentication messages accounting for more than 25% of global SMS usage, even a little quantity of false traffic might cause major issues.
"The volume of total traffic that is fraudulent is in the 5% range, which represents around $5 - 10 billion in value," panellist Michael Reading, senior director, cloudmark technical services at Proofpoint, explained.
March 2022: A new integrated SMS and WhatsApp messaging notification feature have been launched by Infobip Ltd. as a way to boost customer loyalty and improve customer experience.
December 2021: Xandr, a digital marketing, advertising, and retail media platform from AT&T, has been acquired by Microsoft. The acquisition will accelerate Microsoft's capability to provide open web solutions for digital marketing, advertising, and retail media.
A2P Messaging Market Segmentation
A2P Messaging Service Type Outlook
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Transactional Services (Unstructured Supplementary Service Data (USSD)
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One Time Password (OTP) Interactive Services
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Two Factor Authentication (2FA)
A2P Messaging Promotional Services Outlook
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Promotional Campaign Services
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Pushed Content Services
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Inquiry and Search Services
A2P Messaging Vertical Outlook
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BFSI
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Media &
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Entertainment
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Healthcare
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Education &
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Research
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Retail and E-Commerce
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Government
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Utilities &
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Logistics
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IT &
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Telecommunications
A2P Messaging Regional Outlook
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North America
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US
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Canada
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Europe
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Germany
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France
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UK
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Italy
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Spain
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Rest of Europe
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Asia-Pacific
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China
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Japan
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India
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Australia
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South Korea
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Australia
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Rest of Asia-Pacific
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Rest of the World
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Middle East
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Africa
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Latin America
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