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Submitted by Mike Grenville on Fri, 16 Jan 2009 13:53 |
Far from reaching a peak and tailing off, Worldwide Messaging Revenues are set to almost double by 2013 according to a new report from Portio Research focused on mobile messaging that suggests that SMS will continue to be the cash cow of mobile data revenues for some time to come.
More than fifteen years have passed since the world witnessed its first SMS and in spite of many predictions to the contrary, traffic volumes and revenues continue to confound predictions and are expected to keep growing throughout the global economic downturn. Indeed the whole mobile messaging industry worth USD 130 billion in 2008 is predicted to be worth USD 224 billion by 2013, 60 percent of non-voice service revenues. The report, ‘Mobile Messaging Futures 2008 – 2013’ ventures that there is nothing likely to stop continued growth of mobile messaging in the short term, driven by a cocktail of ubiquitous SMS, media rich MMS, enterprise based mobile email and youth conscious mobile IM.
US Overtakes EU
SMS remains ‘King’ because there is no cheap, easy to use alternative that will work with all phones and across all networks, it is loved the world over. Indeed in the US market, where SMS was a comparative slow starter, use per subscriber per month is now almost double the European average. However in China average users send over 100 messages each month whereas the Filipinos continue to be the leading exponents with 755 messages each month. Compared to Asia Pacific’s 40 percent, Latin America and Africa and Middle East contributed a mere 3.9 percent and 4.3 percent respectively to worldwide mobile messaging revenues in 2007.
Although SMS will continue to reign over other data services in Europe, it is expected that
services such as mobile e-mail and IM will cannibalise SMS market share to a certain extent,
and therefore impact the total revenue generated from SMS.
While worldwide SMS traffic is expected to grow from 2.6 trillion in 2007 to 5.5 trillion during 2013 (a CAGR of around 13 percent), Europe’s contribution is expected to decrease from 16.2 percent in 2007 to 14.5 percent by end-2013, partly because of market saturation but also because alternative mobile messaging services are gradually gaining popularity.
By contrast, Portio estimates SMS traffic in Africa and Middle East will grow at a CAGR of 21.6 percent during 2007- 2013—nearly double European growth projections.
Mobile Email
Portio also predict a bright future for mobile email even though Japan is the only market where consumer mobile e-mail has surpassed the use of SMS. Email is still the most popular form of business communication and the report suggests that with greater availability of smartphones and high speed networks, mobile e-mail users worldwide will quadruple from approximately a quarter of a billion users in 2008 to over a billion users by the end of 2013.
More & More MIM
The rising star in the mobile messaging constellation is mobile instant messaging (MIM), which is still beset by the technical problems of interoperability. Worldwide mobile IM revenue was around USD 1.6 billion for 2007, which equalled around 2 percent of the worldwide revenues generated by SMS in the same year.
Portio however predict exponential growth in mobile IM users, surging from a worldwide total of 111 million users in 2008 to hit a massive 867 million users by the close of 2013. Some interesting developments in the Latin American region during 2008 its says hint at accelerated growth of mobile IM there in the near future.
This massive growth in users will be accompanied by an equally impressive 5-fold increase in revenues from approximately USD 2.5 billion in 2008 to approximately USD 12.4 billion in 2013.
Future Brighter for MMS
Since MMS hit the mainstream in 2004 the press and analysts have been critical about its level of success. Back then, they wanted to MMS reach the same value as SMS, USD $30bn, for it be considered a success; finally in 2009 this will be a reality. MMS is growing fast and certain countries, such as China and the United States, are becoming very big markets.
Growth in the North American region has been helped by a growth in customised content for MMS exchange and MMS has become the preferred mode for exchanging festive greetings, especially among the youth segment.
By contrast in many parts of Europe, Portio says that operators need to improve service usability and provide better service experience, as MMS merely as a photo-transfer service faces stiff competition from social networks which also offer photo-sharing capabilities.
Worldwide, MMS traffic of 75 billion messages in 2008 is impressive, and the future growth looks very good in Asia, as affordable camera-equipped handsets flood the market with China leading the way.
Future A2P SMS
To date, SMS has been the most successful mobile data service in almost all mobile markets worldwide, and this trend is expected to continue for some years to come. However, operators have realised that text messaging service requires technical advancements to avoid any commoditisation of the service in near future.
The good news is that operators worldwide have begun to realise that enterprise SMS and A2P/P2A SMS are areas which are relatively under-explored and could provide the next growth spurt to SMS revenues. With a move from focus on teenagers and other consumers will come a need to provide business level services such as SLAs, audit trails and so on.
Time To Get Excited
In conclusion, the report says that "In our own previous editions of this report we have forecast aggressive growth for SMS, yet each year when we start work on the next report we see that our previous forecasts were not aggressive enough. We wholly believe that SMS is at the heart of the action in the mobile industry - SMS is a booming USD 100 billion market."
The puzzle that we at 160c share with Portio is that for most of the last few years mobile operators have for the most part shown little interest in the service. Portio believe every MNO should be feeling very excited about SMS.
The really good news confirmed by this report, as we have said before, is that not only is the next big thing already here, it’s already in the hands of 3 billion consumers worldwide and growing at a rampant pace. As SMS use worldwide doubles over the next few years, operators need to work with vendors to deliver a broad array of innovative new SMS services.
The 381 page ‘Mobile Messaging Futures 2008 – 2013’ provides detailed discussion of all mobile messaging technologies including SMS, MMS, MIM, E-mail, Videomail and Unified Messaging as well as business models, network technology impacts, value chain shifts and advice for operators backed by a wealth of charts and statistics.
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