Worldwide SMS revenues to hit USD67bn by 2012

by: admin Wednesday, February 21st, 2007

Rating: lower prices, growing market

A new report from Portio Research forecasts a healthy future for SMS. Although the growth of SMS revenues will not be as aggressive as the growth of SMS volumes due to declining prices, by 2012 global SMS revenues are expected to reach USD 67bn, driven by 3.7 trillion messages.

The report, Mobile Messaging Futures 2007 - 2012 outlines an exciting future for other mobile messaging technologies especially instant messaging and mobile e-mail amid continued strong worldwide subscriber growth.

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, while the US market has grown much faster than expected. The SMS market continues to be fuelled by new subscribers, despite declining prices.

In Asia alone in every subsequent five minute period for the next six years, 2,267 people will have bought their first ever mobile phone. For most, these new handsets will offer little affordable functionality apart from basic voice and SMS services. This translates into an additional 1.4bn new mobile subscribers in Asia alone with a consequent boom in SMS traffic in the region.

By 2011, the report predicts, 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 to prevent the cannibalisation of SMS revenues in the future.

All of which is pretty amazingly when you consider what a royal pain texting is and how much it costs if you work it out per megabyte. SMS will fade in developed markets, although a significant price differential between it and IM and email might stem the tide for a while. As ever, operators need to be careful that they don’t strangle a new revenue stream because they can’t bear to let go of an old model, regardless of what consumers want. We’re not overly optimistic that they’ll change their spots.

For further information see: www.portioresearch.com