SMS remains key revenue driver for operators

15 Dec 2005

Despite growth in enhanced messaging services over the next five years, SMS will remain a key revenue driver for the messaging market globally, according to a new strategic report from Informa Telecoms and Media. The market is projected to grow to US$120bn in value by 2010.

The Mobile Messaging 2005 report, which looks at SMS, multimedia messaging (MMS), mobile email and instant messaging (IM), reveals that person-to-person messaging will continue to represent the lion’s share of the global messaging business, but application to person (A2P) and interactive messaging will become increasingly important as new services such as mobile marketing and delivery of rich content come on-stream.

“We believe the messaging market has great potential,” said Dan Winterbottom, one of the report’s authors, “with total revenues approaching US$120bn globally by 2010. This is one of the key growth sectors in mobile services.”

Part of this growth will come from new markets, such as the developing areas of Asia Pacific, and part from an increasingly complex marketplace where messaging is driven by business users as well as by consumers. One example of this is mobile email, which is attracting the attention of a number of major players including Microsoft.

The A2P market has seen a considerable amount of evolution recently — increasing penetration of higher-performance handsets, as well as moves by brand owners to go direct to the consumer have combined to create a more attractive environment for content providers and mobile consumers alike.

Alongside existing content such as ringtones and games, the report suggests new platforms such as full-track downloads, end user-generated content such as mobile blogging and fan-based communities are helping to fuel new growth in the sector.

Looking further ahead towards the medium-term future, the outlook for enhanced messaging including mobile email, MMS and IM is promising, said Winterbottoom. “The common theme that runs through the success stories in the sector is consumer benefit — whether that means sharing pictures on a network, downloading music on demand or giving consumers the power to shape mobile content in a way that suits them.”

As part of the research programme for the report, Informa Telecoms and Media carried out an online survey of mobile professionals worldwide to assess opinions and market trends. This revealed for example that device usability is still a key success factor for messaging, and that longer term, technology issues such as how to manage the convergence of different messaging types are critical.

The report concludes that device usability, pricing and quality of service are the immediate concerns to be addressed, but that in the medium term the prospects for enhanced messaging are good.

By John Kennedy