consumer experience, enterprise solutions, technologies

Global traffic of 8.7 trillion but SMS lights to dim by 2015

Growth now driven by enterprise, emerging markets and social networks

Growth in the mass market consumer use of SMS has plateaued, according to new research from Informa Telecoms & Media. Although text messaging will remain a significant source of global revenue for mobile operators until at least 2015 – achieving 8.7 trillion messages by this time, the networks’ budget for messaging is now being squeezed.

“Mobile operators are spending heavily on rollouts of LTE and other high-speed mobile data networks, leaving relatively little in the budget for messaging services,” said Pamela Clark-Dickson, Senior Analyst at Informa Telecoms & Media.

But Informa still forecasts that global SMS revenues will rise to US$136.9 billion by 2015, up from US$105.5 billion in 2010. It also predicts global SMS traffic will increase from 2010’s 5 trillion messages to 8.7 trillion messages in 2015.

The continued, albeit finite, upturn is attributed to government adoption, banks, and brands. Expanded utility and widespread recognition of the text message is driving the growth, through appointment reminders, tickets and coupons, payments and loyalty programmes, says Informa.

However, SMS is also reaching farther and wider than ever before, with new market segments benefiting from ever-sophisticated forms of business integration. Agriculture in developing nations is benefiting by the ability of farmers to receive timely weather reports and crop prices. The figures and case studies reflect that this is now a reality, rather than a feasible utlity which would be nice to see.

Booming social networks are given a nod in the research, with SMS updates and service alerts ensuring all mobile users can be reached, not only those with smart phones.

The ability to post status updates directly via SMS in developing nations, and the slimmed-down-data version of Facebook for feature phones in certain regions must also be helping the data revenues, though this isn’t acknowledged  in Informa’s high level summary.

It’s clear from the findings that SMS stands to remain a central mobile messaging medium for the immediate future. But the rate of revenue growth has long since faltered, and is beginning to drop away much more rapidly in developed markets where the choice of media is greater.

Mobile operators are aware that significant cash stands to leak further if action is not taken to prop up SMS through new services. However, a tightening of budgets around messaging services, and ventures like O2’s new UK-wide wireless network, may suggest a broad acceptance that the end of a remarkable communications medium is upon us, and bigger fish lie elsewhere.

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