Application-to-person (A2P) SMS messaging will be worth $70.1 billion by 2016, according to a white paper from Juniper Research. Data from “A New Era for Messaging” indicates that among the eight key global regions tracked by Juniper, North America and Western Europe will representing the largest shares of the A2P SMS messaging market, followed by Far East/China.
The rest of Asia/Pacific will represent a slightly smaller share of the A2P SMS market than Far East/China, with Africa/Middle East, Central/Eastern Europe and the Indian Subcontinent following. The smallest share will be held by Latin America.
North America Maintains Revenue Lead
North America was the largest market for A2P SMS in 2010, and is expected to remain so through 2016. Western Europe is expected to become the second-largest-market in 2013, consolidating this position through the rest of the forecast period.
Far East/China, currently the second-largest market, is expected to see lower levels of growth and slip to number three in 2013. One reason Juniper cites is the collapse of the ringtone market and maturity of the ringback tone market delivered via premium A2P SMS, which almost wholly exists in China.
A2P Revenue to Overtake P2P Revenue
A2P messaging is defined as those messages which are sent to or from an application. Juniper predicts that in 2016, revenue from A2P messages will overtake that of person-to-person (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.
However, Juniper forecasts that revenue from P2P SMS, commonly referred to as texting, will peak in a number of regions during the period between 2010-2016 as it reaches a low point in valuation. Juniper 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.
SMS Remains Key Part of MNO Revenues
Despite its being the oldest form of value-added mobile services, Juniper says SMS is still the most prominent form of mobile messaging and remains a key part of mobile network operator (MNO) revenues. The penetration of mobile devices, the number of these devices supporting SMS, and number of mobile subscribers engaging in SMS makes it ubiquitous among consumers.
In addition, the simplicity of SMS makes it versatile beyond P2P communication. Juniper says A2P and its opposite, P2A (person-to-application) messaging are increasing their share of the SMS market due to uses such as financial services, advertising and social networking.
In contrast, adoption of MMS messaging has been slow outside the US and China due to pricing and lack of user interface integration. Smartphones have boosted mobile IM, but Juniper does not forecast mobile IM posing any significant threat to SMS dominance. Mobile email is also growing, but Juniper expects most of that growth to occur within older user demographics.
Remote Mobile Payment Users to Reach 2.5B in ’15
The number of remote mobile payment users buying digital and physical goods will reach 2.5 billion by 2015, according to a July 2011 white paper from Juniper Research. Data from “The Good, the Payments and the Mobile” indicates this will represent 40% growth from 1.8 billion users this year.
