Premium messaging service enables users to cater to services of third-party messaging programs that charge fees standard text messaging rates. These fees are either for the content that is sent to the user’s phone or for participation in a program. Text or multimedia messages are sent to or received from programs using shortcodes in place of phone numbers.
Primary stakeholders constituting the premium messaging market include mobile network providers, mobile content developers, telecommunication regulatory bodies and authorities, software developers, and message integrators & aggregators. Increased mobile marketing initiatives by mobile marketers and enterprises have been responsible for the transition of premium messaging into a key market for the Mobile Network Operators (MNOs), content providers, and SMS aggregators. MNOs use premium messaging as a value-added service, which helps in increasing their Average Revenue per User (ARPU).
Increased use of SMS as a business communication tool for operational and marketing communications and decreasing costs of premium messages are major growth drivers for the premium messaging market. Premium messaging is expected to penetrate into several business sectors in the coming years due to changing Customer Relationship Management (CRM) strategies. The ubiquity of text messages owing to compatibility with every handset is a crucial factor that is expected to drive the premium messaging market over the next six years. Customers prefer premium messaging services as they are user friendly, help in generating interest regarding the services offered by the business and also provide value. An increase in the popularity of social messaging platforms is expected to be a restraint for the premium messaging market. Mobile spam and the rise of instant messaging are challenges that are expected to affect the premium messaging market over the forecast period.
On the basis of product, the market can be segmented into Premium SMS (PSMS) and Premium MMS (PMMS). On the basis of origin and termination, premium messages are classified into Application to Person (A2P) and Person to Application (P2A). In A2P messaging, messages originate from the service provider’s application and are sent to a mobile subscriber. A2P messaging is used in numerous applications such as airlines, banks, financial institutes, social networks, financial institutions, entertainment, travel agents, hotel booking sites, internet service providers, satellite TV providers, and mobile service providers among others. In P2A messaging, messages originate from a mobile subscriber and are sent to the service provider’s application. P2A messaging is used in applications such as competitions, opt-in subscriptions, and media voting among others.
Key application segments include Banking, Financial Services, and Insurance (BFSI), media & entertainment, hospitality, outsourcing, retail and shipping & logistics. In BFSI, premium messaging intimates customers about transaction alerts, payment reminders, premium dues, new offers and insurance alerts. In media & entertainment, the service enables customers to participate or subscribe to competitions, quizzes, programs or voting. In hospitality applications, the service is beneficial for informing customers about promotional schemes of hotel, travel and tourism companies and also sends the booking details. Premium messaging service is of great utility in case of outsourcing activities, where companies can connect with their employees, customers, and consultants. The service helps retail store owners to connect with their partners and consumers. Premium messaging service has gained a lot of prominence in shipping & logistics, where customers and companies can conveniently track the status of their shipments.
Three major U.S. players, namely AT&T, T-Mobile, and Sprint have stopped billing customers with premium SMS in 45 states. Proliferation of mobile subscribers in this region is expected to be a key driving force for the premium messaging market. The telecommunication market in countries such as Japan and Korea is characterized by the adoption of Long Term Evolution (LTE) solutions.
The premium messaging market is characterized by aggregators bundling their services and forming collaborations and agreements with each other in order to gain a competitive advantage. Smaller companies operating at low volumes offer the ability to pay-by-message, usually by purchasing batches of credits. Established companies such as mBlox, OpenMarket, and Sybase 365 generally charge a monthly service fee of a few thousand dollars regardless of usage. However, the per-message fee they charge is considerably lower. Other market players include AMD Telecom SA, Infobip Plt., Dialogue Communications Ltd., Mobicage NV, Symsoft AB, and V3Mobi Communications Pvt. Ltd.
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In order to ensure business continuity amidst the COVID-19 crisis, business organizations, especially in highly affected countries are allowing their employees to work from home. The increase in people working from home has led to a surge in demand for online video viewing, downloading, and communication through video conferencing, all of which are leading to increased network traffic and data usage. COVID-19 shall accelerate the demand for agile and flexible work styles and further push the adoption of communication services that tend to improve work-life balance. On the flip side, telecom regulators worldwide have postponed their plans of 5G spectrum auction amidst the global pandemic. This is expected to have an impact on the commercialization of commercial 5G standalone deployments and revenue generated through 5G services. The ongoing pandemic has forced telecom operators worldwide to test their network resiliency and revisit their planned investments, especially in 5G technology. The report will account for Covid19 as a key market contributor.