Despite the rise of advanced and hi-tech communication platforms in recent years, SMS usage for business communication is at an all-time high and the platform is expected to remain entrenched in this space for many years to come.
2022 marked the 30-year anniversary of the advent of SMS, which was initially launched as a person-to-person (P2P) communication platform in the early 1990s. At first, SMS messaging was limited to single mobile networks, but was opened to operate between different networks in the late 1990s. At this stage, businesses were already recognising the opportunities to use SMS as a communication medium, leading to it being increasingly commercialised.
However, a huge transformation for SMS occurred with the launch of the first Apple iPhone in 2007, which was when instant messaging through data networks became a leading trend. This gave rise to application-to-person (A2P) SMS messaging, with businesses relying on a system to disseminate messages to customer groups or individuals.
Going from strength to strength
The A2P space is where SMS is hitting its sweet spot now, where it is gaining popularity and going from strength to strength. According to research by Mobilesquared, about 1.3 million additional businesses around the globe started using A2P SMS in 2020, while spend on A2P SMS is expected to grow 87% by 2025.
One of the main drivers behind the enduring popularity of the SMS platform and its growing uptake by businesses is that fact that it remains the most reliable communication platform to use when sending important and urgent messages to customers. This is especially pertinent at a time when identity verification is increasingly important, and one-time passwords or codes are typically sent to customers via SMS.
At the same time, personalisation is becoming increasingly important for customer engagements and while SMS messaging might appear very generic, the platform is expected to evolve drastically in the context of the Fourth Industrial Revolution in terms of hyper-personalisation. In this sense, SMS messaging is likely to become more effectively targeted at the individual and will become an integral part of businesses’ omnichannel communication strategies.
Given its affordability, SMS will likely become the first foot in the door for businesses looking to engage with customers. Should there be an uptake from the customer following an initial SMS communication, it will most likely result in a communication flow into the other channels that form part of the business’ communications strategy.
RCS unlikely to challenge SMS
While the introduction of Rich Communication Services (RCS) has been touted as SMS version 2 that will eventually replace the traditional SMS platform, this is unlikely to happen in the foreseeable future. This is because RCS relies on data connections to operate effectively. On a continent like Africa, data is not always available or affordable, so SMS still remains the best route to follow for businesses that wish to reach large numbers of customers.
Additionally, businesses have largely recognised that SMS has an opening rate of close to 98%, making it the ideal platform to ensure that message will reach customers. Because it is an instant message, an SMS is ideally suited to communicate special offers and product messaging to customers.
Due to its power and affordability, SMS is likely to remain an international messaging standard for many more years. One of its main advantages is that SMS messaging works on any GSM device and in places such as Africa, where smart phone penetration is still relatively low, SMS still has a major role to play. This is in spite of all the modern hi-tech communication technologies that are coming to the fore.
By Marthinus Jansen van Vuuren, Content Marketing Expert at Infobip