App-to-person SMS represents a major revenue opportunity for mobile network operators. Globally, app-to-person messages are expected to hit 2.19 trillion by 2018, generating predicted revenues of $60 billion.
The figures come from wide-ranging research conducted by UK-based industry analysts mobilesquared. They surveyed more than 50 international mobile network operators and made a number of key findings:
- 32% of mobile network operators have experienced a reduction in person-to-person SMS over the last year
- 50% have experienced an increase in app-to-person traffic, with a third of those reporting growth of at least 6%
- 81% cite decreasing revenues from traditional services like P2P text messaging as their primary concern
When it comes to P2P messaging, mobile network operators have long been upping the ante on competitors, with increasingly generous – and in many cases unlimited – SMS bundles on offer as a way of enticing new users.
They’re no longer just competing with each other. So-called ‘over-the-top’ (OTT) services like WhatsApp and Facebook Messenger are usurping traditional SMS providers as the go-to platforms for interpersonal communication. Half of all mobile network operators who took part in the survey expect to lose at least half of their customers to OTT services by next year.
But while P2P text messaging is on the wane, business is booming for commercial text messaging companies. Consumers, it seems, are compartmentalizing their personal life, preferring OTT platforms for talking to friends while sticking with traditional SMS to engage with brands.
This is great news for mobile marketing campaign managers and small businesses. With an opt-in model predicated on consent and trust, the mobile marketing industry has managed to skirt the problems faced by their email-marketing forbears. Rather than filtering out all commercial messages as spam, smartphone owners are engaging with businesses via SMS because they want to, not because it’s the only option available to them.
There’s no such low-hanging fruit for mobile network operators. They must forge relationships with OTTs and provide competitive price points if they want to leverage revenues from app-to-person SMS.