Mobile operators’ SMS revenues may be under pressure from mobile messaging apps such as WhatsApp, iMessage and others, but Informa Telecoms & Media forecasts that mobile operators will still generate a total of US$722.7 billion in revenues from SMS between 2011 and 2016.
“There will not be a uniform decline in mobile operators’ SMS traffic and revenues as a result of the adoption and use of over-the-top messaging services,” says Pamela Clark-Dickson, senior analyst, Mobile Content & Applications, at Informa Telecoms & Media. “Factors such as the operators’ pricing strategies, and the penetration of smartphones and mobile broadband in a market will determine how quickly and to what extent substitution occurs,” she adds.
“For example, operators offering integrated tariffs that include a balanced proportion of voice, SMS and mobile data, are continuing to see growth in their SMS traffic and less impact on their SMS revenues,” says Clark-Dickson.
While Informa is forecasting either slowing growth or even a small decline in person-to-person SMS revenues in some developed regions and countries, total global SMS revenues will increase at a compound annual growth rate of 3% over the next five years. Western Europe will generate the highest amount of SMS revenues globally between 2011 and 2016, totalling US$174.1 billion, followed by Asia Pacific Developing, where SMS revenues will total US$173.8 billion between 2011 and 2016.
Globally, Informa forecasts that SMS traffic will total 9.4 trillion messages by 2016, up from 5.9 trillion messages in 2011. However, SMS’s share of global mobile messaging traffic will fall from 64.1% in 2011, to 42.1% in 2016. At the same time, global mobile instant messaging traffic will increase from 1.6 trillion messages in 2011 to 7.7 trillion messages in 2016, doubling its share of global messaging traffic from 17.1% in 2011 to 34.6% in 2016.
Informa also forecasts that, by 2016, mobile operators globally will still be generating a higher proportion of revenues from mobile IM than the third-party providers of OTT messaging services will, at US$8.7 billion or 54% of total IM service revenues. However, the OTT messaging service providers’ share of IM revenues will climb from 37% of total revenues in 2011, to US$7.4 billion or 46% of total revenues in 2016.
MMS remains a lucrative service for mobile operators, punching above its weight in terms of revenues. While global MMS traffic is expected to represent just 1.7% of global messaging traffic in 2016, at 387.5 billion events, global MMS revenues will represent 10.6% of global messaging revenues within the same timeframe, at US$20.7 billion.
However, mobile e-mail will be the second highest-revenue generator for mobile operators by 2016, generating US$32 billion in revenues, or 16.3% of total global messaging revenues. “Mobile e-mail is an important revenue-generating service for mobile operators, largely because they offer it as a service bundled with a mobile data plan,” says Clark-Dickson. In addition to Research in Motion’s BlackBerry services, mobile operators also generate revenues from their own-brand mobile e-mail services and from offering data plans that are specifically tied to mobile e-mail services that their subscribers can independently access on their devices.