A2P SMS: The Business of SMS

In this series, I will discuss the opportunities around A2P SMS. I have written earlier about the power and potential of push-based customer communications and Invertising. India has seen good innovation and growth in the use of SMS. However, recent actions by some operators are working to constrain the growth and negatively impact this industry. We will get to that later. Let us start with the basics.

There are different types of SMS (which stands for Short Message Service):

  • P2P (person-to-person) SMS is the most common type of SMS that we are all familiar with. On average, each mobile subscriber in India sends about 25 SMSes each month, so the daily total is a little over 300 million.
  • P2A (person-to-application) SMS is the other form of SMS originated by us, and sent to an “application” rather than a person. These messages are typically sent to shortcodes and cost Rs 3. They can be for request-reply services (get the latest cricket score) or for participating in contests or voting while watching some of the TV reality or game shows.
  • A2P (application-to-person) SMS is where the SMS is sent by an application (software program on a computer) to a mobile. It is also called “bulk push” or “bulk SMS”, since these SMSes are typically sent out in large numbers. Messages that we sometimes think of as Spam fall in this category.

The A2P SMS business has grown substantially in the past few years. Businesses are using these push messages to send out near real-time transactional updates (ATM withdrawals, credit card transactions, stock trades, airline bookings), and also for promotional purposes (cross selling products, events, sales). A number of consumer-centric companies have also created opt-in SMS channels for broadcast services as well as group publishing.

On average, about 100 million SMS daily (25% of the total SMS traffic) are A2P. This business today in India is about Rs 250 crore annually.

Continued tomorrow.