Some commentators on the state of the SMS industry point to the death of SMS as a communications medium. This may be true for global consumer use of SMS messaging in the face of newer communication technologies, but these prophecies of SMS's doom are overstated when looking at how SMS continues to be integral for business messaging.
Twenty-something years of person-to-person (P2P) SMS messaging has fended off its supposed demise in the face of new technology. The latest threat is said to be from third-party messaging services, also known as over-the-top (OTT) messaging services, such as WhatsApp, Facebook Messenger, iMessage and BlackBerry Messenger (BBM). These services use IP-based messaging through apps or online services instead of the SS7 protocol used for SMS messaging.
Indeed, at the end of April, research house Informa reported that in 2012, messages sent via third-party apps overtook SMSes: 19 billion OTT messages compared with 17.6 billion SMSes last year. By next year, Informa predicts 21 billion text messages will be sent, compared to 50 billion OTT messages.
Running dry?
On the face of it, this is surely a disaster for the network operators' P2P SMS messaging cash cow? Despite the forecasted growth in global SMS numbers in the next two years, it looks like the shift in consumer messaging behaviour to third-party services that provide a richer communications experience is here to stay. This does not mean SMS is dead; rather, it becomes a complementary channel in a sea of digital consumer communications.
Yet, it is important to add another social dynamic into to the mix. Increasingly, people are separating out their personal and work lives: Facebook and WhatsApp are for social, while LinkedIn, e-mail and - increasingly - SMS are reserved for business communications. And with social messages moving to other channels so people can start making a bit of sense in their very busy digital lives, the clutter has been removed from the SMS inbox, making SMS a far more valuable channel for businesses.
Take a look at your SMS inbox; its probably shows flight confirmations, banking alerts, appointment reminders, bill payment reminders and other work-related messages, rather than personal communications with friends and family.
The clutter has been removed from the SMS inbox, making SMS a far more valuable channel for businesses.
But, imagine if these messages suddenly started being sent via WhatsApp or if businesses started chatting to customers via Facebook Messenger? The amount of communications demanding attention will increase, and it will become more and more difficult to discern which important messages need attention. The consumer trend, though, is towards digital efficiencies. Customers are very deliberately organising their lives using specific channels, and companies will come short if they try to shoehorn themselves into a channel where they are not welcome.
This shift is being reflected in SMS traffic volumes. South African operators are reporting a 40% decrease in P2P SMS messaging volumes, while WASPs are seeing application-to-person traffic, typically sent by businesses and other organisations such as the government and non-profit organisations, increasing.
Been there, read that
If anything, SMS is encroaching on e-mail, especially in the business space. SMS still sees far higher open and response rates when compared to e-mail. Tomi Ahonen reported at the beginning of 2013 that the read rate for SMS is 97%, compared to 20% for e-mails, while the average response rate for SMS is 26% and e-mail is 5%.
Over and above all that, SMS is still the only way to reach the largest number of people using targeted campaigns to an opt-in database. SMS-enabled cellphones are more prevalent than any other communications medium, whether fixed or mobile, mass or one-to-one. So, for any business looking to communicate with the bottom of the pyramid or high-end smartphone users without having to worry about whether the handset will receive the message, SMS needs to be its primary communications channel.
As well as traditional business uses for SMS, there is also the new generation of Internet companies harnessing the power of the channel. One example is to use SMS as a way to verify cellphone numbers used as a unique identifier on smartphone apps. Doing this, rather than insisting the user signs up with a username, reduces friction on sign-up - just look at the wildfire uptake of WhatsApp compared to Skype on mobile phones. An SMS sent back to the phone during the registration process for an app is a great way to verify the cellphone number of a new customer.
So, whether business SMS is being used at the premium end of the market, to extend the capabilities of smartphones and apps, or at the other end of the spectrum, to reach the most people in a reliable way, now is a good time for companies to harness the power of SMS.
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