Application-to-person messaging: worldwide trends and forecasts 2019–2024

Application-to-person
messaging: worldwide trends
and forecasts 2019–2024

Giulio Sinibaldi and Stephen Sale

Application-to-person messaging: worldwide trends and forecasts 2019–2024 2

About this report

This report provides an overview of the worldwide application-to- G E O G RAPHICAL C O V ERAG E K E Y M E T RICS
person (A2P) messaging services market. It provides information
▪ Worldwide ▪ Application-to-person SMS
about messaging services provided by both mobile network
▪ Central and Eastern Europe outgoing traffic
operators (MNOs) and over-the-top (OTT)1 providers. A complete
(CEE) ▪ Application-to-person non-
set of forecast results is provided in the accompanying Excel data operator/OTT services outgoing
annex. ▪ Western Europe (WE)
traffic
▪ North America (NA)
The forecast is based on several sources: ▪ Application-to-person operator
▪ Latin America (LATAM) IP-based services outgoing
▪ Analysys Mason’s internal research (including our regional ▪ Middle East and North Africa traffic
forecasts, Connected Consumer Surveys and various (MENA) ▪ Business spend on messaging
trackers in the Future Comms research programme) ▪ Sub-Saharan Africa (SSA) traffic
▪ Developing Asia–Pacific (DVAP) ▪ Business spend on fixed fees
▪ interviews with stakeholders in the communications market
▪ Emerging Asia–Pacific (EMAP) ▪ Application-to-person business
around the world. spend and outgoing traffic by
W HO S H O U L D R E A D T HI S R E P O RT use case
▪ Application-to-person business
▪ Strategy and planning executives that are responsible for mobile spend and outgoing traffic by
operators’ communication services strategies and application-to-person industry vertical
wholesale services.
▪ Executives in mobile operators’ technology and innovations teams that
are responsible for developing rich communication services (RCS).
▪ Marketing executives and vendors of communication services
equipment and software, because it will help them to understand the
needs of their operator customers and size the addressable market for
their products.

1The term ‘over-the-top’ is used throughout this report to refer to services that are made available to the general public via the
public internet. The term is defined from the perspective of network operators and is somewhat controversial for this reason, but is
nevertheless widely understood.
Application-to-person messaging: worldwide trends and forecasts 2019–2024
Contents [1]
6. Worldwide trends
7. Worldwide: SMS was the main channel for A2P messaging in 2018, and it
will remain so up to 2024; OTT services will make up for most of the traffic
growth
8. Worldwide: businesses spent USD24 billion on A2P messaging in 2018;
this will grow to USD40 billion by 2024
9. Worldwide: reminders, notifications and promotional use cases account for
the largest share of spend, but customer service spend will grow the most
10. Worldwide: internet, media, entertainment and financial services
accounted for 50% of the A2P spend in 2018; they will retain the largest
market share in 2024
11. Worldwide: global OTT platforms are beginning to focus on A2P messaging
in order to secure a central role in the communication between brands and
consumers
12. Worldwide: the number of RCS A2P deployments is growing, but many
elements must be confirmed before operators can challenge OTT players
13. Worldwide: all players in the value chain are adding software-as-a-service
elements to their A2P messaging offers to target enterprises in the
solution segment
14. Western Europe
15. Western Europe: SMS is and will remain the main A2P messaging channel
until 2024; OTT comms are better positioned than RCS to absorb the A2P
market growth
16. Central and Eastern Europe
3
17. Central and Eastern Europe: SMS will remain the main channel in the
nascent A2P market; Viber’s A2P proposition is gaining traction
18. Middle East and North Africa
19. Middle East and North Africa: SMS is the dominant channel and will remain
so in 2024 because the adoption of OTT services and RCS will not grow
significantly
20. Sub-Saharan Africa
21. Sub-Saharan Africa: mobile money services are driving A2P SMS traffic and
spending; Orange and Vodacom rolled out RCS in South Africa
22. Emerging Asia–Pacific
23. Emerging Asia–Pacific: China has the largest market for A2P
communications and it is dominated by SMS, but WeChat has the potential
to absorb much of the traffic
24. Developed Asia–Pacific
25. Developed Asia–Pacific: OTT communications will dominate the A2P
messaging space; operators in Japan and South Korea jointly rolled out
inter-operable RCS
26. North America
27. North America: RCS is likely to become a relevant A2P channel thanks to
MNOs’ early involvement in the initiative and the residual role of SMS as a
P2P channel
28. Latin America
Application-to-person messaging: worldwide trends and forecasts 2019–2024 4

Contents [2]

29. Latin America: SMS is and will remain the main A2P messaging channel
until 2024; the largest operators are rolling out RCS in their multi-country
footprints
30. Forecast methodology and assumptions
31. Application-to-person (A2P) messaging trends and forecasts: channels and
metrics outputs and definitions

32. Application-to-person (A2P) messaging trends and forecasts: definitions

and examples of industry verticals and use cases [1/2]
33. Application-to-person (A2P) messaging trends and forecasts: definitions
and examples of industry verticals and use cases [2/2]
34. Forecast methodology and assumptions
35. About the authors and Analysys Mason
36. About the authors
37. Analysys Mason’s consulting and research are uniquely positioned

38. Research from Analysys Mason

39. Consulting from Analysys Mason
Application-to-person messaging: worldwide trends and forecasts 2019–2024
List of figures
Figure 1: A2P messages sent per year, by channel, worldwide, 2013–2024
Figure 2: A2P spend, by channel, worldwide, 2013–2024
Figure 3: A2P spend by use case, worldwide, 2013–2024
Figure 4: Number of A2P messages sent for the customer service use case, by
channel, worldwide, 2013–2024
Figure 5: Business spend on A2P messaging services, by industry vertical,
worldwide, 2013–2024
Figure 6: OTT IP A2P traffic per handset per month, by region, 2018–2024
Figure 7: Operator IP messaging traffic per handset per month, by region,
2018–2024
Figure 8: Segmentation of business customers in the A2P messaging market
Figure 9: Number of A2P messages sent each year, by channel, Western
Europe, 2015–2024
Figure 10: A2P messaging spend, by channel, Western Europe, 2015–2024
Figure 11: Number of A2P messages sent each year, by channel, Central and
Eastern Europe, 2015–2024
Figure 12: A2P messaging spend, by channel, Central and Eastern Europe,
2015–2024
Figure 13: Number of A2P messages sent each year, by channel, Middle East
and North Africa, 2015–2024
Figure 14: A2P messaging spend, by channel, Middle East and North Africa,
2015–2024
5
Figure 15: Number of A2P messages sent each year, by channel, Sub-Saharan
Africa, 2015–2024
Figure 16: A2P messaging spend, by channel, Sub-Saharan Africa, 2015–2024
Figure 17: Number of A2P messages sent each year, by channel, emerging
Asia–Pacific, 2015–2024
Figure 18: A2P messaging spend, by channel, emerging Asia–Pacific, 2015–
2024
Figure 19: Number of A2P messages sent each year, by channel, developed
Asia–Pacific, 2015–2024
Figure 20: A2P messaging spend, by channel, developed Asia–Pacific, 2015–
2024
Figure 21: Number of A2P messages sent each year, by channel, North
America, 2015–2024
Figure 22: A2P messaging spend, by channel, North America, 2015–2024
Figure 23: Number of A2P messages sent each year, by channel, Latin America,
2015–2024
Figure 24: A2P messaging spend, by channel, Latin America, 2015–2024
Figure 25: Overview of the main forecast outputs
Figure 26: Overview of the forecast methodology used in this report
Application-to-person messaging: worldwide trends and forecasts 2019–2024

Contents Worldwide trends

Regional trends

Western Europe

Central and Eastern Europe

Middle East and North Africa

Sub-Saharan Africa

Emerging Asia–Pacific

Developed Asia–Pacific

North America

Latin America

Forecast methodology and assumptions

About the authors and Analysys Mason

Application-to-person messaging: worldwide trends and forecasts 2019–2024 7

Worldwide: SMS was the main channel for A2P messaging in 2018, and it will
remain so up to 2024; OTT services will make up for most of the traffic growth
1.5 trillion A2P SMS messages were sent in 2018, accounting Figure 1: A2P messages sent per year, by channel, worldwide,
for 85% of all A2P messages worldwide. We expect the number 2013–20241
of A2P SMS messages to peak at over 2.2 trillion in 2023.
The number of A2P messages and their value are both growing as
brands add mobile and digital channels to interact with their
existing customers and recruit new ones. Person-to-person (P2P)
SMS traffic has progressively been overtaken by that from OTT
services, but SMS is the most-used channel for A2P messaging,
and it will remain so until 2024.
Reliability and reach. SMS is supported by all handsets, and SMS
read rates have historically been the highest of all A2P channels.
SMS will remain the main fall-back channel in the long term.
Security and spam protection. SMS is a safe channel for
businesses to use to interact with customers due to traffic
regulations that are beneficial to consumers and operators’ wide
adoption of anti-spam and anti-fraud filters.
The use of IP-based SMS alternatives from both OTT players and
operators1 will grow more strongly than that of SMS as businesses
look to adopt as many channels as possible to communicate with
their customers. OTT and operator IP user interfaces are designed
to enable A2P (and P2A) conversational use cases, which are the
next step for business-to-consumer interactions. OTT IP will
account for 28% of all A2P traffic by 2024 (from 15% in 2018),
and the operator IP share will reach 12%.
1 Please see the appendix for metrics definitions.
Application-to-person messaging: worldwide trends and forecasts 2019–2024 10

Worldwide: internet, media, entertainment and financial services accounted for

50% of the A2P spend in 2018; they will retain the largest market share in 2024
Large brands account for most of the A2P messaging spend Figure 5: Business spend on A2P messaging services, by
and traffic, but OTT communications brought A2P messaging to industry vertical, worldwide, 2013–2024
SMEs, particularly those in the retail sector.
Brands with a higher degree of digitalisation and more-extensive
customer-facing operations lead the adoption of A2P messaging
across all industry verticals.
Internet, media and entertainment. Firms in these verticals are
core customers of CPaaS platforms,1 and have been among the
first large-scale adopters of multi-channel A2P messaging by
integrating CPaaS APIs into their digital service infrastructure.
They accounted for 28% of the A2P messaging spend in 2018.
Financial services. Banks and insurance companies have led the
large-scale implementation of A2P messaging for security use
cases, by providing one-time and dynamic passcodes, for
example. They were responsible for 22% of the A2P messaging
spend in 2018. We expect them to maintain an A2P leadership
role, even though some of them (especially in Europe) will move
verification and authorisation processes to within their apps.
Retail. Retail businesses in developing A2P markets are the main
users of A2P messaging due to their large SMS-based marketing
campaigns. Retail SMEs also use OTT communications to talk to
their customers: 12 million businesses (mostly SMEs) in China
have a WeChat account, and WhatsApp business has 5 million
users (mostly SMEs) 1 year after its launch.2
1 CPaaS stands for communication platform-as-a-service. These tools (usually flow builders) allow developers to set up and operate
an operation or business solution that can be integrated into an enterprise’s infrastructure.
2 WhatsApp (2019), Celebrating One Year of WhatsApp Business with New Web and Desktop Features. Available here.
Application-to-person messaging: worldwide trends and forecasts 2019–2024

Contents Worldwide trends

Regional trends

Western Europe

Central and Eastern Europe

Middle East and North Africa

Sub-Saharan Africa

Emerging Asia–Pacific

Developed Asia–Pacific

North America

Latin America

Forecast methodology and assumptions

About the authors and Analysys Mason

Application-to-person messaging: worldwide trends and forecasts 2019–2024 36

About the authors

Giulio Sinibaldi (Analyst) is a key contributor to Analysys Mason's Consumer Services and Digital Economy research practices. He is interested
in mobile strategies, over-the-top (OTT) platforms, Internet regulation and consumer behaviour, and his skillset includes quantitative forecast
modelling and big data analytics. Giulio holds a BSc and an MSc in Economics from Bocconi University.

Stephen Sale (Research Director) directs Analysys Mason's consumer research, which covers consumer mobile, fixed, convergence and video
markets. His specialist areas are mobile operator strategies, customer experience and telco growth opportunities. He has extensive experience
in advising senior executives on strategic issues and speaking at and chairing conferences. Before joining Analysys Mason in 2004, Stephen
worked in the industry on areas that include VoIP, next-generation service architecture and broadband access. He has a degree in economics
and an interdisciplinary MRes from the University of London.
Application-to-person messaging: worldwide trends and forecasts 2019–2024 37

Analysys Mason’s consulting and research are uniquely positioned

Analysys Mason’s consulting services and research portfolio Consulting

We deliver tangible benefits to clients across the telecoms
industry:
▪ communications and digital service providers, vendors,
financial and strategic investors, private equity and
infrastructure funds, governments, regulators, broadcasters
and service and content providers
Our sector specialists understand the distinct local challenges
facing clients, in addition to the wider effects of global forces.
We are future-focused and help clients understand the challenges
and opportunities new technology brings.

Research
Our dedicated team of analysts track and forecast the different
services accessed by consumers and enterprises.
We offer detailed insight into the software, infrastructure and
technology delivering those services.
Clients benefit from regular and timely intelligence, and direct
access to analysts.
Application-to-person messaging: worldwide trends and forecasts 2019–2024 38

Research from Analysys Mason

Application-to-person messaging: worldwide trends and forecasts 2019–2024 39

Consulting from Analysys Mason

Application-to-person messaging: worldwide trends and forecasts 2019–2024

PUBLISHED BY ANALYSYS MASON LIMITED IN NOVEMBER 2019

Bush House • North West Wing • Aldwych • London • WC2B 4PJ • UK
Tel: +44 (0)20 7395 9000 • Email: research@analysysmason.com • www.analysysmason.com/research • Registered in England and Wales No. 5177472
© Analysys Mason Limited 2019. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means – electronic,
mechanical, photocopying, recording or otherwise – without the prior written permission of the publisher.
Figures and projections contained in this report are based on publicly available information only and are produced by the Research Division of Analysys Mason Limited independently of any
client-specific work within Analysys Mason Limited. The opinions expressed are those of the stated authors only.
Analysys Mason Limited recognises that many terms appearing in this report are proprietary; all such trademarks are acknowledged and every effort has been made to indicate them by the
normal UK publishing practice of capitalisation. However, the presence of a term, in whatever form, does not affect its legal status as a trademark.
Analysys Mason Limited maintains that all reasonable care and skill have been used in the compilation of this publication. However, Analysys Mason Limited shall not be under any liability for
loss or damage (including consequential loss) whatsoever or howsoever arising as a result of the use of this publication by the customer, his servants, agents or any third party.