Global SMS revenue to dip $23B by 2018

Global SMS revenue to dip $23B by 2018

Summary: SMS revenues will fall to US$96.7 billion from US$120 billion in 2013, with Asia-Pacific seeing the sharpest decline over the forecast period, but adoption in this space is expected to increase among enterprises.

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TOPICS: Telcos, Apps, Smartphones
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Global annual SMS revenue will dip to US$96.7 billion by 2018, with the Asia-Pacific region experiencing the highest drop, but is expected to see increased adoption among enterprises. 

business-mobile-phone
Despite general declines across the globe, SMS adoption will increase in the business environment.

According to stats released by Informa Telecoms & Media, annual SMS revenue would drop by US$23 billion from US$120 billion in 2013 to hit US$96.7 billion in 2018, due primarily to growing adoption of over-the-top (OTT) messaging apps in both developed and emerging markets.  

The Asia-Pacific region would see the sharpest dip in annual revenues over the forecast period, dropping from US$45.8 billion in 2013, to US$38 billion in 2018. Several developers of OTT messaging apps hail from the region, including China's Tencent which developed WeChat and South Korea's Kakao and its Kakao Talk

China would see most of the revenue loss in the region, clocking US$19.6 billion in 2018 compared to US$25.4 billion this year.  

In Western Europe, Italy was expected to see the sharpest decline, registering US$2.2 billion SMS revenue in 2018, down 7.54 percent in compound annual growth rate (CAGR) from US$3.3 billion this year.

Informa, however, noted that mobile operators in markets with high postpaid subscriber base would be able to mitigate the impact of OTT messaging apps, by offering unlimited or large bundles of SMS in their contract plans. In South Korea, for instance, where 99 percent of mobile subscribers were postpaid, SMS revenues would fall comparatively slowly at a 3.5 percent CAGR over the forecast period, from US$2.51 billion in 2013 to US$2.1 billion by 2018. This gradual decline was in spite of the popularity of Kakao Talk in the Asian market. 

While most of the 59 economies and seven regions Informa covers in its study would see their SMS revenue fall over the forecast period, markets such as Argentina, Japan, and United Arab Emirates would continue to enjoy some growth over the next two to three years. 

The research firm also noted that enterprise use of SMS also would see growth as businesses and government agencies recognize the benefits of tapping the platform as an inexpensive, highly accessible, and reliable communications channel to engage customers, employees, partners, and the general public. 

"Although we are forecasting a decline in SMS revenues, due largely to the well-documented competition from OTT players, the diverse messaging market provides so many complementary use cases that it would be naïve to think that SMS has no future role to play," Gareth Sims, Informa's head of forecasting, said in the report. 

Informa global SMS revenues

 

Topics: Telcos, Apps, Smartphones

About

Eileen Yu began covering the IT industry when Asynchronous Transfer Mode was still hip and e-commerce was the new buzzword. Currently based in Singapore, she has over 16 years of industry experience with various publications including ZDNet, IDG, and Singapore Press Holdings.

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2 comments
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  • Global SMS revenue to dip $23B ? That's great

    SMS = Short Message Scam.

    It is a scam. A walled-garden message system that has the world's highest data costs.

    At 160 characters, it costs US 5 cents per SMS (140 bytes) = US $383,000 per Gigabyte (Source: DSLreports). SMS is a crime against phone users.

    The internet is slowly breaking down this telco swindle. The sooner SMS disappears the better. The sooner telcos stop providing inflated services, and instead just provide us with zeros and ones, the better.
    Vbitrate
    • Not really a scam... Just technology turning legacy

      Kind of a useless comparison really? Why the hell did we pay 10 pence per text here in the UK all the way through the 90's when we could have just whatsapped?! How stupid were we?

      So why were they 10 pence and now only 5? How comes my first ever contract had only 500 messages per month, but my new one has unlimited?

      Well it's no different to why mobile phone calls usedto cost me 35p per minute and again are now unlimited in my contract - back in the 90's the GSM networks were new and still being install, who,e companies came into existence and set up their infrastructure at phenomenal cost... Oh and a comparatively tiny user base used the service ... So now they have less investment to make and or users to gain revenue from... That lowers the cost.

      But why pay at all? After all it's just a few bytes of data?? Why are these networks charging you so much? Ever noticed how your text will send without a data connection, but your iMessage or whatsapp or bbm won't? It's not the same technology. My network syncs my text messages across my devices through data messages free of charge - i receive a text message, they send me two additional dats messages to their app. This is because they are my ISP - it costs them nothing additional to send this. It is sent to the internet. A text is network to network - the network you send the message to charges your network to receive it, the same as calls. Why were mobile to mobile calls three times the cost of mobile to landline?? Because the receiving network charged the sending network.

      Now the internet is replacing the old gsm networks and we are heading towards data being used for all our calls and texts, but the higher frequencies required for mobile dat shortens range and requires more masts. For this reason in the uk there are now very few regions you cannot make and receive calls and texts by moving a couple of feet, there are however huge areas that you cannot even receive a GPRS signal. As long as you can't get a dats connection, you need the sms service that costs more.

      We will get to a data only system, but it will take time. I'd sooner the networks focus on getting at least hspda connections nationwide and increasing their infrastructure in populated areas - mobile dats in-central London in the rush hour is completely unusable because there just isn't enough bandwidth to go round.

      This is when i'm quite happy i have unlimited text messages - the imessage simply can't send as blue.
      MarknWill