A while ago we talked about how instant messaging apps were slowly eating away at SMS revenues. Today we’ve got wind of a few figures that shows this is in fact the case, according to a report by Ovum, these new IP-based messaging services have cost telecom operators $8.7bn in lost SMS revenue in 2010, and a further $13.9bn in 2011.
This pattern seems like it will continue to balloon into 2012. “Ovum warns operators to rework their legacy services if they want to secure their future position in the messaging market.”
It’s not all bad news though, for businesses at least. Although SMS revenue is gradually being eaten away in the peer to peer (P2P) market, which makes a lot of sense, as friends will have each other’s phone numbers or social messaging “pins”, the Application to Person (A2P) continues to grow.
A2P messaging is the sort of SMS messaging in which banks, hairdressers, delivery companies, advertisers and such send you an SMS to give you details of whatever they want to let you know. Juniper Research estimates that A2P SMS will overtake P2P SMS by 2016, being worth more than $70bn.
Whilst these IP-based messaging services have their advantages; such as “real-time” communication and the apparent absence of cost, they remain extremely fragmented. Off the top of my head I can name at least 8 IP-based messengers – iMessage, Whatsapp, Blackberry Messenger, Skype, Touch, Facebook Messenger, Yahoo! Messenger and KIK.
So, it seems SMS has one killer feature at its disposal, which is its wide reach and compatibility; it can reach any phone be it smart or not, on any network and without the need for internet access. This is why SMS will continue to grow in an A2P world. Our World.
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Infographic – Smartphone users still prefer SMS
