Nigeria is taking giant leap to become the most significant market for Application-to-Person (A2P) messaging with a key focus to unlock massive investments as well as revenue.
The stride wouldn’t have been possible without the innovative leadership of the Nigerian Communications Commission (NCC).
A2P messaging is any kind of message traffic in which a person is receiving messages from an application rather than another individual.
A2P messaging became popular around the year 2000, when the popularity of SMS as a communication method began to increase.
However, for over two decades, Nigeria did not have a regulatory framework for the initiative.
But in a bid to secure Nigeria’s digital ecosystem and unlock revenues for the government, the NCC in December, 2024 unveiled a draft regulation for A2P messaging for stakeholders input.
The global A2P messaging market size was valued at $68.74bn in 2023 and it is projected to reach $71.49bn in 2024 and $97.84bn in 2032.
According to Statista, in 2022, the application-to-person text messaging (A2P) global market was generating approximately $48bn in revenues.
In Nigeria, the NCC hopes to use regulation to help industry players tap into the global market which will in turn yield revenue for the government.
NCC’s also has a strategic focus which is centred on three key stakeholders- the government, consumers, and the industry—our licensees.
“For the government, A2P messaging is a powerful tool for communication with citizens, enabling the efficient delivery of public services and information.
“For consumers, it guarantees timely, secure, and reliable access to essential updates and services. Our goal is to create a sustainable and thriving A2P messaging ecosystem that protects consumers, promotes fair competition, and unlocks new opportunities for growth,” the Executive Vice Chairman (EVC)/CEO, Aminu Maida said.
Some of the issues bordering A2P are the lack of regulation as the NCC said there is “No unified oversight.”
Another issue is that of revenue leakage as “payments often bypass local systems, not taxed, reducing economic benefits.”
Other issues are security risks and unregulated termination rates leading to inconsistencies.
To secure transform the A2P ecosystem in line with global standards, the NCC has made moves to “Standardise tariffs and fair competition. Enhance security against Spam and Fraud.
“Increase local revenue through taxation and levies and comprehensive market oversight.”
For a fair regulatory ecosystem, the NCC has made the criteria open for registered corporate bodies, persons with proof of financial capabilities for capital and operating expenses as well as those who have contract agreement wit a host operator or national carrier.
The NCC has also made licensing seamless with a N10,000 fee with tenure of five years to enable massive investments in the ecosystem.
A telecommunication expert, Michael Ade said the A2P messaging is an efficient approach to communicating information in real-time with guaranteed delivery.
Ade said, “The rise of mobile marketing and the expanding global mobile user base has driven the widespread adoption of A2P SMS. By 2030, the global A2P SMS market is projected to reach nearly $100bn.
“A2P messaging enhances consumer outreach and supports global scalability. Leading A2P service providers handle billions of messages monthly, showcasing how businesses can scale A2P platforms to meet their diverse needs.”
Another expert Emmanuel Igoh said regulating the A2P ecosystem will benefit industry players, the consumers and government.
Igoh said, “A standardised regulatory environment will provide opportunities for stakeholders like the government to earn more revenue. By leveraging A2P messages, companies can fulfill all their text communication requirements while gaining significant financial and operational advantages.
“Nigerian has been silent on exploring the opportunities until the NCC made this giant move to regulate A2P. Many Nigerians will benefit from this especially business.
“We are aware that the Bola Tinubu-led government is looking for avenues to build up revenues for the execution of project and the NCC has carefully mentioned that the A2P regulatory framework will look towards revenue generation for the government.”
According to him, some of the innovative features of the A2P regulation in Nigeria are the technical and security requirements which allows integrate with local MNOs and the capacity to route A2P Messages through Centralised SMS firewall.
On the interconnection and integration, Igoh said, “NCC regulation provides that A2P provider must interconnect with licensees who provide voice and SMS services pursuant to an Interconnect Agreement duly approved and filed by the Commission.
“All local MNOs and international A2P messaging service providers must integrate their systems with the centralized A2P platform within a specified period.”
He said these requirements are essential for an effective A2P regulation.