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 short codes 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 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. 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. 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.

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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.

About Grand View Research:

Grand View Research, Inc. is a U.S. based market research and consulting company, registered in the State of California and headquartered in San Francisco. The company provides syndicated research reports, customized research reports, and consulting services. To help clients make informed business decisions, we offer market intelligence studies ensuring relevant and fact-based research across a range of industries, from technology to chemicals, materials and healthcare.

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