Application generated mobile texts to exceed $70 billion revenues by 2016 - overtaking person-to-person messaging, says research

04 May 2011

A new report published today by Juniper Research forecasts that revenue from A2P SMS will exceed $70bn by 2016. Revenue from these types of messages will overtake that of P2P SMS during that year as the strategic focus for players within the mobile messaging ecosystem shifts from communication between individuals, to sending and receiving service-enabling messages.

A2P messaging – defined as those messages which are sent to or from an application – has a wide variety of use-cases. These include financial services, advertising, marketing, business administration, ticketing, television voting and any other service where information needs to be sent to, or received from a large number of users in text form.

Mobile Messaging Report author Daniel Ashdown argues: “While SMS is one of the oldest value-added services, it has an enduring appeal for a number of reasons. In terms of text communication it is unrivalled on the mobile device in its ubiquity – virtually every handset in the world can send and receive it. This makes it extremely appealing for brands who want to enable communication with their customers, as unlike other messaging mediums, they know it will reach almost its entire intended audience.”

However, revenue from P2P (Person-to-Person) SMS – commonly referred to as texting – will peak in a number of regions during the period 2010-2016 as it reaches a low point in valuation. The report finds that even in other regions where SMS has not reached the same levels of traffic, revenue growth will be moderate due to continuing competitive pricing, particularly of prepaid message buckets.

Other key findings:
•    Premium-rate SMS and MMS will decline due to challenges from other forms of billing/delivery.
•    MMS traffic and revenue will continue to grow, but A2P MMS will not have as bigger impact as A2P SMS.
•    Mobile IM will increasingly become a customer retention exercise as with fixed line services