State of the Union: The Rapidly Growing A2P SMS Market in the USA

While the global A2P SMS market is estimated to grow at a cumulative annual growth rate (CAGR) of above 4% between now and 2025, growth in the USA is lining […]

While the global A2P SMS market is estimated to grow at a cumulative annual growth rate (CAGR) of above 4% between now and 2025, growth in the USA is lining up to be far more spectacular.

According to a report published by Grand View Research, a CAGR of 20.3% in the same timeframe will see the US market alone worth approximately one-fifth of the global market in its own right – $12.6 billion. It’s not just huge corporations turning up the A2P SMS dial either; swathes of smaller enterprises are coming to understand the urgency this digital channel drives.

The rise of A2P SMS

Brands’ engagement with consumers is defined by the conversations they have with them and two-way A2P SMS is ideal for powering these. Given SMS is ubiquitous, cost-effective, cuts across all demographics, and easily tracks deliverables, it lends itself perfectly to numerous applications as well. The advantages do not stop there either.

We also see high conversion and ROI with SMS. The ability to set up automated direct responses saves time for sales and support reps. Add this to the fact that it is easily integrated WITH user-friendly APIs and you have a winning formula.

Long code vs short code

Two-way messaging is enabled using short codes or virtual long numbers, also known as long codes or virtual mobile numbers. Long codes resemble standard phone numbers with 10 digits. Short codes, having between 3 and 6 digits, are a different story: they are typically higher priced and have stringent regulations and requirements relating to them, often requiring a lengthy approval process. This has pushed many towards using long codes.

Carriers in the US are now coming together to affect change for one simple reason: long codes were designated by the operators for P2P communication, not A2P, B2C, or B2B. But usage of local long codes for A2P messaging occurs a lot. While it goes against CTIA guidelines and presents regulatory compliance issues, it has been problematic to track, trace, and enforce correct usage. The so-called ’10DLC’ (10-digit long code) initiative aims to change all that and wipe the slate clean.

History has shown time and again that for anything to be successful, it must be easy to implement and use: the fact that businesses will be able to use and rapidly convert their existing landline numbers for 10DLC usage as well speaks volumes. At last no requirement for a separate number for content delivery and the bonus of a low-cost option for sending decent volumes of SMS.

With a throughput of 5 to 15 messages per second (almost certain to be increased over time), 10DLC will undoubtedly prove popular for SMEs in particular. Factor in all codes being sanctioned by the termination vendors and it all points to 10DLC becoming the new gold standard for business text messaging.

The future of 10DLC

Verizon has gone live with A2P 10DLC on their network, all long code traffic sent through them now being subject to 10DLC rules and fees. AT&T and T-Mobile have soft-launched (the latter enabling a ‘grace’ period and not charging fees until March 1st, 2021) and soon Sprint will be joining the party. Furthermore, T-Mobile and AT&T now prohibit shared short codes.

Anything that promotes confidence and opens up the world of marketing content delivery to a legion of companies across the USA, for whom it was either previously expensive or plain impossible to achieve, has to be a great thing.

A2P originators approved by Tier-1 US carriers for business messaging will underpin all this, bringing a welcome dose of new-found confidence to the content delivery landscape. Mitto looks forward to powering even more of your conversations in the near future.