SMS revenues to reach US$67bn

20 Feb 2007

SMS continues to be the star of the data services show with traffic volumes and revenues continuing to confound predications, new research claims. But the medium faces the threats of cannibalisation of its revenues as well as the onset of mobile instant messaging (MIM).

However, 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 US$67bn, driven by 3.7 trillion messages.

According to a report by Portio Research, mobile messaging including instant messaging (IM) and mobile email will continue to have strong worldwide consumer growth.

But the popularity of SMS will remain strong because it is the cheapest, quickest and easiest form of peer-to-peer mobile communication.

Unlike most mature markets, SMS traffic has not flattened but continues to boom while in the US the market for SMS has grown much faster than expected.

Despite declining prices, the SMS market is being fuelled by new subscribers.

In Asia alone, every five minutes 2,267 people will have bought their first mobile phone.

For the majority these new handsets will offer little functionality except basic voice and SMS services.

This, Potio claims, translates in to an additional 1.4bn new mobile subscribers in Asia alone with a consequent boom in SMS traffic in the region.

By 2011, Portio predicts that mobile instant messaging (MIM) will supplant SMS as the mainstream messaging services, especially in the US, as smart phones and wireless internet proliferate.

Operators will need to strike a balance between SMS and IM pricing in order to prevent the cannibalisation of SMS revenues in the future.

By John Kennedy