Telecom operators lost $13.9 billion SMS revenues in 2011 due to social messaging

By Telecom Lead Team: Telecom operators have lost $8.7
billion in SMS revenues in 2010, and $13.9 billion in 2011. The lost is due to
consumers’ use of IP-based social messaging services on their smartphones.


The decline, representing nearly 6 percent of total
messaging revenue in 2010 and 9 percent in 2011, is expected to continue as the
popularity of messaging apps is growing.


According to an earlier Ovum report, non-voice revenue in
Asia Pacific will grow 9.3 percent to $116.98 billion in 2012 from $107.16
billion in 2011.


Non-voice revenue in Asia Pacific to grow 9.3 percent to $116.98
billion in 2012

Recently, Ovum said that emerging market operators will
continue to experience strong connections growth in 2012. Mobile broadband will
be the main driver of this growth, but it will also act as a strategic


Ovum suggests that operators need to rework their legacy
services to improve messaging revenue. Social messaging has disrupted
traditional services, and operators’ revenues in this area will come under
increasing pressure.


Tapping into the creativity of app developers, forming
industry-wide collaborations, and leveraging their usage data and strong
relationships with subscribers are the key ways for operators to ensure that
they hold their ground in the messaging market,” said Neha Dharia, consumer
analyst at Ovum and author of the report.


However, despite the threat to messaging revenues, the
strong presence of social messaging should be looked upon as an opportunity.
This threat will drive telcos to consider alternative sources of revenue, such
as mobile broadband. And now the market has been tested, operators know what
types of messaging services work.


In addition, operators are in a position of strength
because they control the entire messaging structure through their access to the
user’s phone number and usage data. The established billing relationship is a
great advantage, as is the fact that operators control to a great extent the
services to which the user is exposed.


However, offering innovative messaging services and
aligning revenue schemes with models in the social world will not be enough to
win the battle against social messaging. Industry-wide collaboration and
co-operation will be the key to growth in the messaging realm.


Ovum suggests that operators must remain open to
partnering with app developers, sharing end-user data with them and allowing
integration with the user’s social connections. Working closely with handset
vendors will also be important; they control some of the most popular social
messaging apps, and can also provide preloaded applications. The most important
factor, however, will be co-operation between telcos. They are no longer
competing merely among themselves, but must work together to face the challenge
from the major Internet players.


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