Global SMS traffic set to hit 9trn in four years

26 Jan 2011

Global SMS traffic is set to grow from 5trn in 2010 to at least 8.7trn by 2015, according to new research. Global SMS revenues are to grow from US$105.5bn today to US$136.9bn by 2015.

“Mobile operators are spending heavily on rollouts of LTE and other high-speed mobile data networks, leaving relatively little in the budget for messaging services, however SMS remains a core service for mobile users and continues to account for the vast majority, 80pc in 2010, of their data-and-messaging revenues,” said Pamela Clark-Dickson, senior analyst at Informa Telecoms & Media.

“SMS will continue to be the most popular form of messaging for a number of reasons: universal access and interoperability across devices and mobile operator networks, ease of use, reliability and low cost.“

The rising importance of SMS

Although traditionally used primarily by consumers, SMS is increasingly being used by government departments, banks and financial institutions, brands, retailers and transport providers, among others, for increasingly sophisticated purposes.

SMS is used not just to deliver alerts, information services or mobile marketing campaigns; it is used to deliver appointment reminders, tickets, coupons, banking and payments, and loyalty programs, among others.

SMS is also becoming increasingly popular in emerging markets, in particular for the delivery of a range of financial services to mobile users who would otherwise not have access to banking products, for information services, and for other types of messaging services, including e-mail and instant messaging.

Indeed, the types of information services that are being delivered by SMS in emerging markets in Africa and other regions are playing a vital role in improving the economic and social well-being of mobile users and their families in these markets.

For example, farmers can use SMS to receive weather reports, crop prices and information about fertilisers, and in so doing hopefully increase their crop yield and allow them to get the best possible price for their harvest. Meanwhile, clinics can harness SMS to better manage their stocks of medication or to allow patients to check whether their medicines are fake, which will ultimately help reduce the spread of diseases, such as malaria and HIV.

“The fact that SMS is the universal data communications channel on the mobile device is also a huge benefit for businesses and government departments in developed markets and, more recently, for social networks like Facebook and Twitter. By enabling SMS updates or alerts for their services, social networks, businesses and government departments can reach all mobile users, and not just the segment of users that owns a smartphone,“ adds Clark-Dickson.

SMS will remain a key mobile messaging medium over the coming years, but growth in SMS revenues is slowing or falling, particularly in developed markets, and mobile operators may lose a significant cash cow if they do not act to introduce or enable the introduction of new and innovative SMS-based services.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years