If you send an SMS right now to a friend or loved one, chances are they will read its content within minutes, unless they’re driving, asleep, or in a meeting or a cinema. And even then, their first opportunity, perhaps during a loo break, will see them checking their phone. SMS may be in its third decade, yet it continues to resonate with many, despite some sectors viewing it with disdain.
I often hear that SMS is merely a commodity, and the term “bulk messaging” particularly irks me when used to describe business SMS (Application-to-Person SMS, A2P). Such terminology does a disservice to a mobile digital channel that needs no introduction, one that over 5 billion people globally are comfortable with, and which requires neither internet connectivity nor advanced smartphones. Email cannot match the “open rate” of SMS, underscoring the value of SMS.
We need to talk more about SMS
From my experience, numerous organisations worldwide are using SMS effectively. But many others are not harnessing this incredible tool. This underutilisation, I believe, stems from the business messaging industry’s failure to unite in publicising SMS’s effectiveness in capturing attention and driving tangible outcomes, such as conversions.
While TV adverts for various goods and services, including mobile data and new handsets, are commonplace, advertisements promoting mobile business messaging, particularly SMS, are rare. This baffles me, given the market’s rapid growth and projections to reach approximately $78 billion by 2027 (source: Juniper Research). It’s high time we amplify how potent SMS can be if utilised correctly and how accessible it is, even for the smallest organisations.
There’s significant untapped growth potential globally, especially for small and medium-sized enterprises. With some collaboration and concerted effort from various stakeholders, we could achieve much more.
Money and SMS
The past couple of years have been financially tough for billions globally, with basic commodities’ prices increasing at a rate not seen in recent memory. In the UK, essentials like sugar, milk, and pasta have seen soaring prices. Similarly, the cost of SMS is rising rapidly in many countries.
This increase is particularly pronounced in international A2P SMS, such as the larger brands’ messages to international stakeholders. The trend has become noticeable with two-factor authentication (2FA) use-cases, especially since WhatsApp Business Messaging (SMS’s primary competitor) altered its commercial model on 1st June 2023.
Overnight, WhatsApp became a more compelling commercial option than SMS for 2FA in most countries. This shift has highlighted the pricing strategies of many mobile network operators (MNOs) in the realm of international A2P.
At a crossroads
The market is free, and MNOs can set their prices, but the A2P SMS industry is at a crossroads: significant SMS users for 2FA (like Google, Meta, Amazon, and Apple) are actively seeking alternative channels that deliver comparable results. This is no small feat, considering SMS’s unique ubiquity as a mobile engagement channel that doesn’t require internet access or a smartphone.
SMS should be valued, supported, and allowed to thrive. Left to its own devices, it could grow organically, but think about what strategic marketing could accomplish. But this growth is being stifled by challenging commercial models. Mobile network operators should seize this revenue opportunity without pushing the limits too far, lest they reach a suboptimal point of no return.
James Williams is the director of programmes at Mobile Ecosystem Forum.