Europeans will send nearly 17 billion mobile messages per month in 2007 according to Forrester Research. Growth in email and other forms of instant messaging will continue although revenue will fall as cheaper forms of messaging emerge.
“The entry of instant messaging (IM) and email introduces the economics of the Web to the premiums of SMS, yielding a loss of pricing control for operators,” said Forrester analyst Michelle de Lussanet. “For fast person-to-person messages, consumers don’t need the richness of enhanced messaging service (EMS) or multimedia messaging (MMS). They will stick with SMS for its ease-of-use, lower price, and fast speed. Further, operators will not abandon the proven SMS cash cow because the technology serves as an enabler for other services like voice mail and MMS. With the availability of the new messaging choices, 10 percent of SMS traffic will be cannibalised over those five years — but 6 billion messages of incremental traffic will raise messaging revenue to E25 billion in 2007, a 42% increase on 2002.”
One in six European mobile users uses IM on their PC currently. Forrester believes that Europeans will ‘flock to email on phones’ and says that email is the number one mobile service that users are willing to pay for.
“Going forward, SMS will continue to serve the messaging needs of mainstream consumers, claiming two-thirds of messages sent in 2007,” de Lussanet added. “However, an average effective price of E0.07 per SMS that year will limit revenue to E12 billion – 47% of the total, and 34% less than in 2002. EMS will simply go unnoticed, and only one in five mobile users will use EMS regularly – yielding a meagre 2% of total messaging traffic and 3% of total revenue. In 2007, one in four users will send IM messages regularly. IM users will drive massive traffic, sending 50 messages per month on average in 2002 and 40 in 2007, and IM will contribute 19 percent of all traffic and 10 percent of revenues.
“Rich messaging traffic will split evenly between MMS and email in 2007, with more than a billion messages each per month — although more consumers will regularly use MMS, email users will send more messages. MMS will yield E8 billion euros in revenue in 2007 at an average effective price per message of E0.80, while email will draw one-fourth as much revenue at E0.02 per message. However, this picture masks the profound displacement of MMS’ potential by email – if all mobile emails sent were MMSs instead, MMS would generate an additional E27 billion in revenue over the five years.”
