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Free messaging apps will cost Indian telcos over $1B in 2013

Indian consumers' fading love affair with SMS will cost local telcos US$1.2 billion dollars this year, and rise to US$3.1 billion in 2016 as they increasingly move toward OTT services.
Written by Mahesh Sharma, Correspondent

Indian telcos will lose billions of dollars in the next few years as users increasingly communicate with their friends via the OTT services.
Ovum analyst Neha Dharia told ZDNet that Indian mobile users were sending fewer text messages via their mobile carriers, and instead communicating for relatively no cost via messaging apps, which utilizes an Internet connection.
She said the trend cost Indian telcos US$781 million last year. It will cost US$1.2 billion this year and US$3.1 billion in 2016.
"We expect to see more such device and operator-led cooperation with social messaging players which will accelerate the growth of these apps in India. Along with this, the boom in smartphones and Internet-enabled phones will fuel the growth of messaging apps even further," Dharia said.
Indians subscribers only sent an average of 38 SMSes per month in the quarter ending December 31, according to the latest figures from the Telecom Regulatory Authority of India.
This was only an increase of two messages per month compared to the corresponding period the previous year.
One messaging app, Hike, allows users to send free text messages to any phone in India, with recipients able to reply at normal rates. The app has been downloaded five million times since it was launched in December 2012, and recently its owners Bharti Softbank invested US$7 million investment to attract 15 million users.
Kavin Bharti Mittal, BSB head of product and strategy, told ZDNet said the messaging evolution is being targeted by companies such as BSB--a joint venture between Japanese telco Softbank and Indian conglomerate Bharti, which owns the country's biggest telco Airtel.
"This is great for operators in such countries as the value of SMS jumps up tremendously. At the same it also provides a seamless and easy first step to internet for those who are coming online for the first time thus increasing revenues," Mittal said. 
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