Operator Messaging Revenue to Decline 20 Percent by 2017
Published on: 13th Jan 2014
Global expenditure on operator messaging services which includes SMS and MMS declined for the first time in 2013 following its peak in 2012. According to Strategy Analytics operator revenue from messaging services fell by almost 4 percent last year to just below $104 Billion.
Continued intense competition for subscribers between operators combined with the fast growing popularity of over-the-top instant messaging services like WhatsApp, Line Messenger and Tencent's WeChat will drive a 20 percent fall in global operator messaging revenue by 2017.
The decline in messaging revenue will be more pronounced in regions with the greatest penetration of smartphones and data users, like North America and Western Europe, where SMS and MMS expenditure will decline by 38 percent and almost 28 percent respectively.
Nitesh Patel, Director, Wireless Media Strategies (WMS), noted "The fast rising popularity of smartphone messaging applications, both from smartphone vendors Blackberry and Apple, and independent messaging applications like WhatsApp, Line Messenger and WeChat, is significantly hurting both operator messaging volumes and revenue. While SMS volumes remained flat in 2013, operator revenue from messaging declined by almost 4 percent"
Strategy Analytics believes mobile operators must act on a number of fronts in order to mitigate the decline in messaging revenue, including bundling SMS into integrated price plans.
David MacQueen, Director, Media & Apps added "While RCS/ RCS-e enables mobile operators both to evolve mobile messaging beyond SMS and MMS and keep operators relevant in mobile messaging, it will not offset the current decline in messaging revenue. We forecast that by 2017 there will be just below 180 million users of RCS/ RCS-e based services. However, RCS/ RCS-e messaging will contribute little direct revenue for mobile operators. To offset lower consumer spend levels, carriers should aim to tap opportunities such as mobile marketing, or increase innovation by opening up SMS platforms to businesses and the developer community"