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A2P SMS and chat apps are increasingly favored by enterprise businesses


By Laurie Fullerton | Freelance Writer

July 25, 2017 | 3 min read

More and more enterprises are seeking the use of application to person (A2P) SMS as a channel for customer engagement, notification and authentication and increasingly embrace chat bots via chat apps or social media and other rich communications services (RCS) messaging.

A recent report by Ovum’s Enterprise Messaging Survey canvassed 100 companies in seven countries to investigate their use of messaging as a channel for customer engagement, notification, and authentication and revealed a growing business appetite for more interactive forms of messaging.

The use of A2P SMS - which is typically a web app that communicates to a mobile subscriber - continues to surge with 1.28tn messages by 2019 up from 1.16tn in 2016, indicating a 23% increase in use of two-way SMS in the past year.

The strongest indication of growth is the deployment of chat bots, the survey said. A quarter of respondents indicated that they are using the nascent technology to automate customer interactivity with specific demographic groups such as millennials.

"The Enterprise Messaging Survey suggests that there is an appetite from enterprises to use richer forms of mobile messaging to engage with their customers," said Pamela Clark-Dickson, practice leader, Digital Communications and Social Networking, Consumer Services, Ovum. "The pressure is now on the telecoms industry to ensure that their business-to-consumer messaging services remain relevant and attractive, especially as Apple joins other chat apps in engaging with the enterprise market, via its upcoming Business Chat offering."

A2P SMS is increasingly favored by enterprise businesses

There is also a clear indication from the respondents that they are keen to see SMS evolve as a service, with 37% stating that new features such as custom branding, the delivery of enriched content, and read receipts, would encourage them to send more SMS.

Moreover, over a third of respondents, 36%, indicated their organizations would be interested in using an enhanced SMS service, such as the Rich Communications Services (RCS) standard. From these respondents, the most appealing feature of RCS messaging was the ability to send images and videos - logos and way-finding maps from an airline, for example.

This group also indicated that the capability to provide chatbot-like interaction with their customers via RCS was a draw.

Interestingly, enterprises clearly value the advanced features that RCS offers. Over half of the respondents would be willing to pay between 1.5 times to three times the price of an ordinary per-message SMS.

"While A2P SMS continues to grow, the report clearly shows that enterprises are moving past an experimental phase with new messaging formats like Chat bots and examining, more closely, how best they can engage their customers with the right format at the right time," said Robert Gerstmann, co-founder and Director CLX.

"It's also encouraging to see that businesses clearly value a more immersive interaction with their customers. In the near future, this will be delivered by RCS type messaging services and Chat Apps allowing the Enterprise message to go beyond text to include app-like interactivity and rich media. It's everything MMS promised but unfortunately didn't deliver."

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