Guest Post: Will SMS weather the 4G storm?

Given the news that WhatsApp alone accounted for a stupendous 18 *BILLION* messages on New Year’s Eve, it’s not surprising that many are wondering about the future of the SMS medium. Oh, I think it’s certainly here to stay for years, but once you’ve got a reliable data connection, you rarely need to use the SMS bearer.

This is a topic that Robin Kent, Director of Operations at Adax Europe explores in today’s guest post. Here’s a quick boilerplate on Adax by way of context:

Adax is an industry leader in high-performance packet processing, security, and network infrastructure for the All-IP network. For 30 years Adax has uniquely blended software and hardware expertise to create the most productive and efficient products in the telecom industry. The broad and highly-flexible Adax product set consists of protocol controllers, packet processing boards, software protocols, and now integrated systems, for Core Network nodes, Security Gateways, Femto/Home eNodeB Gateways, Policy Servers and Data Offload devices. So Robin and his colleagues are pretty deep into the telecoms technology layer. Let’s hear what he’s got to say. Over to you Robin:

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The text message recently celebrated its 20th birthday; commentators everywhere celebrated the day while at the same time darkly predicted its decline. The recent 4G roll out has also fuelled discussions about the future of SMS, namely, will mobile internet kill of text messaging with affordable apps and more sophisticated content?

Over the top (OTT) messaging; messages sent via the internet in the form of Whatsapp, Facebook and Skype, is on the increase and predicted to rise as 4G becomes more prevalent. However, evidence actually suggests that SMS is not dying but in fact it’s evolving. Globally, Informa forecasts that SMS traffic will total 9.4 trillion messages by 2016, up from 5.9 trillion messages in 2011 and the technology will drive revenues of $722.7 billion over the next five years. Although SMS’s share of global mobile messaging traffic is predicted to fall from 64.1 per cent in 2011, to 42.1 per cent in 2016, this suggests that SMS messaging is levelling off, rather than dying out.

Although much of the above revenue will continue to come from the Western world, the real growth in SMS is within the emerging markets of Africa, Asia Pacific, the Middle East and Latin America. Although one of the primary reasons for growth in these markets is the slower uptake of OTT messaging, simply because of the cost and availability of smartphones, its real growth is predicted to be in mobile payments. Over half the world is unbanked, but a study by the World Bank predicts that three quarters of the world’s population have access to a mobile phone. While in many of these emerging markets, a trip to the bank can be a three day round trip; mobile banking, in the form of authenticated SMS messages, provides an easy, fast and secure form of payment without the need to pre-register or have a debit or credit card.

In 20 years, the SMS has gone from a message typed on a computer to a phone that didn’t have the technology to reply, to financially empowering millions of people worldwide. Mobile messaging services are now being used for far more than the simple communication of one short message. Files can be shared, goods and services paid for, content viewed and, as 4G becomes prevalent, even more services will utilise mobile technology. The evolution of mobile messaging and communication systems will also change the way these services are billed for.

OTT messaging has been seen as the downfall of SMS because current data bundles let users send endless numbers of messages via Whatsapp or Facebook without touching the comparatively more expensive text message. However, it can be argued that there could be a slowdown on the use of these services once operators have figured out a way to bill for them. When the first commercial text message service was launched, it was free because operators had not worked out an effective system to charge users but by 2001 the standard 10p per text charge had been levied on the service.

The same will eventually happen for data. Deep Packet Inspection (DPI) is a technology that can be used to differentiate the data, giving visibility to the operators of video, music, VoIP, email and Web sessions. But it isn’t all bad news for the user; DPI can be used to control the delivery of content, improve network security and allow both the network and the user enhanced control. DPI will deliver the option to actively control packet data pipe sessions through traffic filtering and redirection. By gaining a better understanding of the data, operators can move away from bundle packages and bill individuals more effectively by focusing on what they use and how. This can help ensure that subscribers are not only receiving the correct package of services they purchased from their service provider, but support bill shock and advice of charge applications which provide the user with peace of mind.

It is likely therefore, that text messages will weather the storm and continue to exist alongside OTT messaging as a desirable form of communication. There are still clear benefits of SMS messaging; the ability to send a short message without pre-downloading an app or accessing a web page and the big advantage of being able to send a message to any user on any network, regardless of what handset they own. In 20 years, SMS has come a long way, from the first message ever sent to being a ubiquitous service by the end of the 20th century; it is now being used as an alternative payment method. Like all services, the providers are always looking for the best way to deliver the best deal to the customer, as well as ensuring they make a profit. This can only be achieved by greater visibility of services, users and demands. The increase in OTT messaging will certainly have a massive effect on the mobile industry from the point of use to billing. However, the simplicity and convenience of SMS technology means that it is likely to reign supreme for many years yet as mobile usage continues to increase worldwide and emerging markets all over continue to benefit from services facilitated by the humble text.

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Thanks for taking the time to write, Robin!

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