Mobile operators revenues set to grow by transferring from A2P SMS to A2P RCS, with every US$1 earned from A2P SMS in 2022 equating to US$5.67 earned from A2P RCS.
By Gavin Patterson, Chief Data Analyst, Mobilesquared
A2P SMS messaging has already proved its value to the mobile operator community with a simple business case based on transparent termination rates that has significantly swelled coffers in recent years. Investment in SMS firewalls has also produced a marked reduction in the volume of grey-route, unauthorised traffic, thereby ensuring that mobile operators are better able to monetize this significant revenue stream.
In 2018, the A2P SMS messaging market was worth US$17.01 billion according to Mobilesquared research (Global A2P SMS Messaging Forecasts by Country & Operator, 2017-2022) with official white-route traffic amounting to US$15.96 billion – equivalent to 93.8% of the total – and mobile operators pocketing a total of US$13.72 billion.
Over the next four years, to end-2022, A2P SMS messaging spend was forecast to reach US$26.61 billion, with white-route traffic accounting for 97.2% of the total – and operators banking a total of US$22.27 billion.
However, this does not account for either the traffic or revenue lost (or ‘transferred’ may be a better description) to A2P RCS messaging. The fact is that, according to more Mobilesquared research (Global RCS Business Messaging Forecasts by Operator, Country, Region & OS – 2018-2023), just US$1.07 billion of operator A2P SMS spend is likely to have moved to RCS by 2022.
However, the emergence of conversational marketing and conversational commerce on RCS means that every US$1 earned from A2P SMS in 2022 would equate to US$5.67 earned from A2P RCS – and that is completely ignoring the enormous potential from P2A RCS… which is likely to be even higher.
In effect, the emergence of RCS will grow the overall, operator driven A2P messaging business from a total of US$22.27 billion in 2022 (totally on SMS), to US$27.28 billion – and with A2P RCS still only contributing 22.3% of that total.
If operators haven’t already started planning for RCS, then now is the time to do so.
Want to share your views on RCS? Contact Gavin at gavin@mobilesquared.co.uk

Author Jo Hall

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