The Rise & Rise Of SMS

Wednesday, February 21, 2007

Portio Research forecasts a healthy future for SMS, IM, MIM, and mobile e-mail.  The study shows SMS in particular continues to be a phenomenal success as the cheapest, quickest and easiest to use form of peer-to-peer mobile communication.  Portio Research forecasts global SMS revenues to reach $67 billion, and SMS volumes to reach 3.7 trillion messages, by 2012Meanwhile, markets have continued to grow and greatly exceeded the predictions of similar research carried out in 2005.  SMS traffic has not flattened out in mature markets but continued to boom whilst the US market has grown much faster than expected.  The SMS market despite declining prices continues to be fuelled by new subscribers.  Portio estimates that every five minutes, 2,267 people in Asia buy their first mobile phone.  This will continue every five minutes for six years.  For the majority, these new handsets will offer little affordable functionality apart from basic voice and SMS services.  This translates into an additional 1.4 billion new mobile subscribers in Asia alone with a consequent boom in SMS traffic in the region.

Although revenues from voice calls still comprise 80% of worldwide total mobile revenues, operators globally are focussing on data services for increasing their average revenue per user (ARPU).  Of the various data services available, while attracting none of the glamour as a leading product in most MNOs service portfolio’s, SMS actually accounts for approximately 75-80% of non-voice service revenues worldwide.  Portio Research also predicts that by 2011, mobile instant messaging (MIM), especially in markets such as North America, will supplant SMS as the mainstream messaging service as smartphones and wireless Internet proliferate.  Operators, the report suggests, need to strike a balance between SMS and IM pricing in order to prevent the cannibalisation of SMS revenues in the future.

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