Business-as-a-Service: Driving SMS growth in India

By Nikhil Shoorji, Infobip Vice President Sales and Marketing India

SMS technology has been an important part of the mobile ecosystem for more than two decades. It has seen transformation from a service information channel into one of the largest global communications platforms, and its success has inspired a wave of app-based person-to-person messaging services including WhatsApp and Line.

The true value of SMS in recent years, however, has not been its contribution to the P2P arena. Instead, it’s a result of rapid growth within application-to-person (A2P) messaging.



The benefit of A2P SMS for India

The rise of A2P is happening all across the globe. Yet India has become of the largest and most important regions for generating this type of SMS traffic. Driven by the steady appetite among businesses and governmental bodies for professional services, A2P SMS has led to new innovation in an established and widespread technology.

Specialist companies and messaging providers have also emerged over the last decade to support this demand, and huge investments have been made to improve the performance and capabilities of A2P SMS.

For example, in the past 12 months alone, India has seen A2P SMS breathe new life into a wide range of traditionally analogue industries. From the country’s postal service and state railway announcing the use of SMS alerts to improve customer services, to India’s meteorological department introducing free SMS alerts for farmers to make them aware of extreme weather conditions, the adoption of this technology has been broad.

The growth of A2P SMS

A2P’s newly established foothold on the messaging market is largely due to how constant SMS has remained over the past decade while other technologies have experienced significant changes. The unique advantage of SMS is that the operator networks on which this technology runs make it ubiquitous.

Anyone, with any device, from the latest smartphone to the most basic feature phone, can receive a text message. Thanks to the extensive networks of operators, millions of people rely on SMS to receive vital information that would otherwise be difficult to access. Yet it’s not only governmental bodies taking advantage of this, as businesses are also keen to make the most of SMS technology.

Research from the Retailers Association of India last year found that 95 per cent of retailers see mobile as an essential component of their marketing strategy, thereby contributing to a huge and continuing uptake of SMS technology in the region.

Combine this with the exceptionally high read rates SMS generates – over 98 per cent, according to recent research by Frost and Sullivan – and it’s no surprise that this technology has become a great asset for any business looking to better communicate with its customers.


A2P SMS and mobile operators

For operators, this is a highly lucrative opportunity. The tremendous volume of SMS messages being sent has the potential to translate into significant revenue, especially as P2P messaging declines in the wake of data-led alternatives. The uptake of A2P SMS means message delivery can still be a revenue generating service for operators. It’s happening in a different way to P2P, however – it is no longer users that are driving demand, rather the businesses and official bodies looking to reach them.

Yet, despite this tremendous opportunity, operators often lack the capabilities to take advantage of A2P SMS. The delivery and management of an A2P SMS platform is time and resource intensive, which may not be a priority for operators who are forced to invest in new consumer-facing technology to retain a competitive advantage.

Specialised mobile messaging providers have been quick to meet this demand, addressing the requirements of enterprises and helping operators retune their businesses – from managing clients and volume levels, to overseeing integration, back-end processing and billing tools.

Although, to date, this relationship has been vital in allowing operators to benefit from A2P SMS, in 2016 and beyond operators will gain far more control as a result of the Business-as-a-Service (BaaS) model. This goes beyond merely connecting existing messaging infrastructure with an operator’s networks. In the case of A2P SMS, the BaaS proposition not only means that a specialist will provide the entire messaging platform, they also manage the service on the operator’s behalf.

Driving the growth of A2P

Rather than working as separate entities, the future of A2P SMS lies in messaging specialists partnering directly with operators. Not only will they benefit from the existing infrastructure that a messaging provider has, an operator will also be able to take advantage of their experience to unlock the full potential A2P messaging has to offer.

SMS is a technology with unparalleled reach boasting an ability to communicate with over 6 billion mobile devices across the world. With innovation driving more and more SMS use cases and, in turn, ever higher volumes of messages, SMS remains a lucrative technology for operators despite an overall decline in P2P messaging.

It’s only through the BaaS model, though, that operators can make the most of A2P SMS without having to handle the day to day running of the service, giving them the opportunity to once again reap the benefits of one of the world’s most versatile and ubiquitous technologies.