May 21, 2024
Ict

Enterprise A2P SMS Market is Estimated to Witness High Growth Owing to Rising Demand for Convenient Communication

The enterprise A2P SMS market enables businesses to send transactional messages such as one-time passwords (OTPs), payment notifications, promotional alerts, flight/train status updates and many more directly to their customers’ mobile phones. A2P SMS offers cost-effective communication for enterprises in comparison to other digital marketing channels. It delivers messages instantly and ensures higher open and response rates. The global enterprise A2P SMS market is estimated to be valued at US$ 50.53 Billion in 2024 and is expected to exhibit a CAGR of 3.9% over the forecast period 2023 to 2030.

Key Takeaways
Key players operating in the enterprise A2P SMS market are nfobip Limited, OpenMarket Inc., AMD Telecom S.A., Syniverse Holdings Inc., FortyTwo Telecom AB, Twilio Inc., Mblox Inc., Nexmo Inc., and CLX Communications AB. These players are focusing on developing innovative SMS solutions and services to capitalize on growth opportunities.

The growing requirement of cost-effective mobile marketing solutions and increasing demand for advanced messaging platforms from various industry verticals such as BFSI, retail, healthcare, travel and hospitality etc. are expected to offer significant growth opportunities for players operating in the global enterprise A2P SMS market.

Expansion into developing markets of Asia Pacific and Middle East & Africa through partnerships, mergers and acquisitions is expected to help key players in strengthening their geographic footprint and tapping untapped opportunities over the forecast period.

Market drivers

The rising adoption of mobile banking and explosion of mobile commerce are expected to drive the demand for enterprise A2P SMS services. Mobile banking provides convenience to customers for carrying out financial transactions through SMS on their mobile phones. Similarly, enterprises across e-commerce, online shopping and travel are extensively using SMS for order confirmations, shipment notifications, payment alerts and more, thus augmenting the market growth. Growing usage of A2P SMS as an authentication mechanism for account verification through OTPs sent on mobile numbers is another major factor accelerating the adoption of enterprise A2P SMS solutions.

PEST Analysis
Political: Government regulations influence communication via SMS for business transactions. Regulations around data privacy and cybersecurity pose political risks.
Economic: Economic cycles impact the IT budgets of enterprises and their investment in A2P SMS solutions. Rising inflation also impacts communication costs.
Social: Younger demographics prefer apps and OTT messaging over SMS. However, SMS remains popular for notifications and alerts as it has near-ubiquitous reach.
Technological: New technologies like RCS messaging and mobile web create opportunities for A2P traffic. Increased smartphone usage raises demand for contextual and personalized engagements via SMS. Data analytics drives improved targeting and personalization.

The Enterprise A2P SMS market in terms of value is concentrated most in North America and Europe. Both regions account for over 60% of the total market revenue owing to high mobile and internet penetration with tech-savvy populations. The markets in North America and Western Europe are relatively mature while growth in A2P SMS adoption is higher in emerging economies of Asia Pacific and Latin America.

The fastest growing regional market for Enterprise A2P SMS is expected to be Asia Pacific excluding Japan. Countries like India, Indonesia and Vietnam are poised to offer the highest growth opportunities due to a rapidly increasing young mobile-first demographic and growing dependence on digital services. Rising digitalization of enterprises across Asia Pacific will drive the adoption of A2P SMS solutions for marketing, customer engagement and authentication over the forecast period.

*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it