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The A2P (Application-to-Person) messaging market has been witnessing significant trends in recent years, driven by technological advancements and changing consumer behaviors. One notable trend is the increasing adoption of A2P messaging across various industries such as banking, healthcare, retail, and entertainment. Businesses are leveraging A2P messaging to communicate with their customers more effectively, whether it's for transactional notifications, promotional messages, or customer service interactions.
Moreover, the growing preference for mobile communication channels has fueled the expansion of the A2P messaging market. With the proliferation of smartphones and the rise of mobile internet usage, businesses are recognizing the importance of reaching customers on their preferred devices. A2P messaging provides a convenient and efficient way to engage with consumers directly on their mobile phones, making it an indispensable tool for businesses looking to enhance their customer engagement strategies.
Another key trend in the A2P messaging market is the emergence of advanced messaging technologies such as RCS (Rich Communication Services) and chatbots. These technologies offer enhanced capabilities compared to traditional SMS, enabling businesses to deliver richer and more interactive experiences to their customers. RCS, for example, supports features like high-resolution images, videos, and interactive buttons, making it ideal for marketing campaigns and customer support interactions. Similarly, chatbots powered by artificial intelligence enable businesses to automate customer interactions and provide personalized assistance round the clock.
Furthermore, regulatory changes and compliance requirements are shaping the A2P messaging landscape. Governments around the world are implementing regulations to combat spam, protect consumer privacy, and ensure the security of messaging platforms. As a result, businesses need to adhere to strict compliance standards when sending A2P messages, including obtaining consent from recipients and implementing measures to prevent misuse of messaging channels. Compliance with these regulations is crucial for maintaining trust and credibility with customers while avoiding hefty fines and penalties.
Additionally, the COVID-19 pandemic has accelerated the adoption of A2P messaging as businesses seek alternative ways to engage with customers amidst social distancing measures and lockdown restrictions. From appointment reminders for healthcare services to delivery updates for online purchases, A2P messaging has played a vital role in keeping consumers informed and connected during these challenging times. As the world adapts to the new normal, businesses are likely to continue relying on A2P messaging as a reliable communication channel.
Moreover, the A2P messaging market is witnessing consolidation as larger players acquire smaller firms to expand their service offerings and geographic reach. Mergers and acquisitions are becoming increasingly common as companies look to strengthen their competitive positions and capitalize on synergies in the rapidly evolving market. This consolidation trend is expected to continue as players vie for market dominance and seek to differentiate themselves through innovative solutions and value-added services.
Covered Aspects:
| Report Attribute/Metric | Details |
|---|---|
| Market Opportunities | Increase in mobile subscribers |
| Market Dynamics | High use of short messaging services (SMS) among enterprises High emphasis on customer acquisition and engagement |
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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