SMS – from Volume to Value

I clearly remember the day when in 2002 our family got its first mobile phone. Yes, a mobile for entire family. It was the rugged and most strongest mobile of our family for decades to come, Nokia 5110. It was such a show-off yet proud moment to have those transparent plastic belt-holder cases. That same evening, we got the SIM card from Hutchison Essar and the world changed for us. It was other thing that Dad was not happy paying for those astonishing outgoing calls and certainly angry paying for incoming calls from wrong numbers too.

Today, I don’t believe myself when I force my memory to recall that we used to pay, I believe, Rs.5 per SMS, am I right?

It was the time when we really had to limit the letters count to 160 so that we don’t end up typing two SMS’s in one and get charged for it. We welcomed Short Message Service in our lives to avoid paying Rs. 9 per minute as incoming call and Rs.18 per minute for outgoing. It was also the advent of a new lingo. Kind of ok to type cu soon and 143 while planning for 2mor or 2Day, saying 10Q to the species from Venus who we found 6Y… the list goes on and on and on.

While Hutchison Essar became Hutch and then later Vodafone and our family stuck with it, it was Reliance who when launched its CDMA phones with almost free tariffs other operators offered bundle of joy by offering 10,000 Free SMS’es with a month-long recharge or something similar.

10,000 FREE SMS! We couldn’t believe how and when will we be able to use it, or will we ever finish it?

Well, cut to a new decade. We now need to have a reason to use SMS which are still offered free, and that too on unlimited basis. But, when was the last you picked up the phone to send SMS to anyone?

Will the SMS die in coming years? We all know the answer to it – NO.

SMS has just got reformed from humble person-to-person SMS to now mostly Application-to-Person (A2P) SMS’es. There are forecasts which state that App-to-Person SMS will be generating revenue in billions of USD.  

These are the time when SMS story transforms from volume to value.

Person-to-Person SMS are becoming value-less in the fight with chat apps such as WhatsApp, WeChat, Telegram and FB Messenger. Though, telcos will be still making money from SMS through businesses who will be using the humble SMS from notification, verification to transactional information. The promotional SMS are still a sure shot way to grab the user’s attention on his mobile screen, even if it’s for a micro-second. It’s the other case that most of the time these promotional messages get deleted in bulk.

Lately, mobile companies have upgraded their SMS application itself to make it look attractive and engaging with logo of brand appearing to sender providing a more attractive view of the SMS box.

Starbucks SMS Link India

Check-out how Starbucks reaches out to its clients with custom text message and a web-link to get more details on the offer. SMS has become a sure shot way to communicate on a condition that receiver of your SMS trusts or at the least knows you. Random SMS’es doesn’t enjoy the same privileges.

As per news reports, the A2P segment has grown 20% every year since 2014 to 210 billion messages in 2018, and is expected to reach 265 billion in 2019. Five years ago, the number was less than 100 billion.

A2P SMS has been accepted unanimously across industries be it alerts and OTPs from Banks, Subscriber info in offline retail, One-time-password confirmations from online retail, delivery info from food apps, Flight/ Railways information details etc. The types of SMS ranges from transaction alerts to notifications to branding and marketing.

As people adopted digital transactions and started using apps for their various needs SMS comes to rescue for validation and authorisation for every such digital engagements. As the volume model of SMS drastically declined from person-to-person messages in India the rise in app-to-person messages has done wonders by adding value in the whole game. Indian telcos charge the app companies around 10 paise per message within India and Rs 1 for international ones. With revenues falling from such B2B associations, the SMS business can be termed as SOS for telecom sector which is under heavy financial stress amid stiff competition.

To sum it all, you as a mobile user can stop using SMS but SMS will not stop existing.