Have the operators press the panic button yet? SMS revenue down $14bn in 2011!

Daniel Thomas over at the FT highlights some potentially alarming research indicating that operators aren’t having a good time with messaging revenues:

Telecom operators lost almost $14bn in revenues in 2011 from a decline in text messaging owing to the rise in use of social messaging services provided free over the internet on smartphones, research has shown.

Ovum, the independent technology analyst, said that the $13.9bn loss represented nearly 9 per cent of total messaging revenues in 2011, and came on the back of an $8.7bn loss of SMS revenues in 2010.

via Texting revenues hit by web services – FT.com.

[There’s a subscription required to view the full post]

Although Daniel’s post is highlighting research — which can differ dramatically from reality, I very much reckon the writing is on the wall for operators and their messaging profits.

I’m pleased.

It’s been downright ridiculous, it really has. The amount of money charged to consumers for the transmission of 140 character text messages still continues to REALLY frustrate me.

Which is why for a long, long time, I take every opportunity to route my traffic via Apple’s iMessage or RIM’s BBM platform.

, , ,

6 Responses to Have the operators press the panic button yet? SMS revenue down $14bn in 2011!

  1. Kurtainz February 22, 2012 at 2:17 pm #

    Couldn’t agree more, can’t believe it still costs me 35p to send an MMS in this day and age.

  2. Ewan February 22, 2012 at 2:19 pm #

    I think that’s the same for me Kurtainz — it is simply stupid!

  3. Adrian February 22, 2012 at 7:58 pm #

    Perhaps I’m showing how out-of-touch I am here, but I don’t know many people who don’t have (near enough) unlimited texts as part of their plan/prepay bundle.

    And those who don’t have (near enough) unlimited texts don’t use the internet on their phones.

    Is this an actual loss or a theoretical “if x number of whatsapp messages were texts messages instead we’d have made x. Therefore we have lost x.”?

  4. Abad Ali February 23, 2012 at 7:27 am #

    Aren’t operators making money selling ‘internet’ (minutes, bundles, capacity whatever) that customers use for free social messaging. I don’t think its as big a loss in under-developed market with less smartphone penetration where consumers are still evolving. Speaking of social media messaging, it is eating out the ’email’ consumption as well!

  5. Ewan February 23, 2012 at 7:55 am #

    Good point!

  6. Allen Cross February 23, 2012 at 11:13 am #

    Excellent question. I think the best answer is, ‘a bit of both.’

    Far as I can tell, this number was generated through an independent analyst’s work, not directly from itemized figures in the telcos’ quarterly filings or guidance documents. In all likelihood, the author(s) collated some ex parte data — taken from surveys, insider snooping and God-knows-where else — they’d dug up, then used that to model the real world. And the point of all this jiggery-pokery was to tot up a ‘loss’ or ‘gain’ score.

    Does that mean this report has no validity? Well, it’s abundantly clear many users are switching to free SMS services. And here is the US, big SMS bundles are costly options for all but top-tier phone plans. So, it’s reasonable to suggest the telcos are now losing, er, some amount of money…somewhere. But I think it’s anyone’s guess as to whether an analysts’s exercise in creative maths bears any resemblance to actual revenues.

    BBC’s reportage here is among the better.: http://www.bbc.co.uk/news/technology-17111044

Leave a Reply

Powered by WordPress. Designed by Woo Themes

Real Time Analytics