Global mobile messaging revenues will double to almost $70 billion by 2007 as a result of further growth of SMS text messaging and uptake of new services. This is according to a study from media and technology consultancy Analysys.
The report,
Where Next For Mobile Messaging? Driving revenues profitably and controlling cannibalisation reveals that total messaging volumes came to 670 billion in 2002, of which 131 billion originated in Western Europe. These figures will multiply over the next few years to the extent that by 2007, the number of messages sent worldwide is predicted to reach 2600 billion (607 billion in Western Europe).
After a difficult 2001, the majority of network operators in developed markets saw average revenue per user (APRU) increase last year (see Mobile Data Services Help Stem Operator Losses). This was, in part, due to the increased use of SMS and emerging services such as MMS and mobile instant messaging/email. Global revenues from these sources are expected to grow from $31 billion in 2002 to $69 billion by 2007. Western European revenues will rise from $13 billion to $25 billion over the same period. These estimates are in line with previous assessments by Ovum (see Consumer-Driven Mobile Data Revenues To Hit $71bn By 2007, Says Ovum).
It has been shown that operators are becoming ever more reliant on messaging services (see Operators Look To Cash In On Mobile Services) as they can achieve significantly higher revenue per Mbyte and profitaility per user than voice telephony, and consume very little network resource.
Mark Heath, co-author of the report commented: “At typical prices, one minute of voice telephony generates generates less than $1 per Mbyte of network resource consumed. This compares with over $1000 per Mbyte for an SMS message.”
He recommends that operators should take every opportunity to maximise income from messaging services and not seek to copy the uncompromising price models of voice telephony which would impair profits and stretch the capacity of existing networks.
SMS ceiling has not been reached The biggest excitement in the wireless industry has been generated by 3G and multimedia messaging services (see MMS To Spur Mobile Services Market, Says Report). However, Analysys believes there is still room for improvement in the SMS market.
“Simple text messaging must not be overlooked,” said co-suthor Alastair Brydon. “There is a big opportunity to grow usage by older people, along with a host of developing applications, such as mobile marketing and integration with TV and radio content.”
With regard to recent innovations, Brydon is of the opinion that network operators need to set affordable prices and package MMS with other services. He does nonetheless acknowledge that there is a danger in offering mobile instant messaging and email services at a lower level than SMS as they have the potential to cannibalise existing revenues.
