Operators lost $13.9b to social messaging in 2011
The SMS star is dying according to a report from technology research firm Ovum, which estimates operators lost billions in revenue to social messaging in 2011.
Estimates from ‘The Casualties of Social Messaging’ report value the impact of increased use of internet-based social messaging via smartphones at $8.7bn in 2010 and $13.9bn in 2011 in lost revenues for telecommunication providers globally.
The popularity of social messaging, the use of social apps or websites to send messages instead of traditional SMS, MMS, or email techniques, is forecast to continue to grow as smartphone penetration increases.
Consumer analyst at Ovum, Neha Dharia, warns telecommunications operators will need to rework their legacy services to secure future profitability in the messaging market.
“Social messaging has disrupted traditional services, and operators’ revenues in this area will come under increasing pressure,” Dharia comments. “Tapping into the creativity of app developers, forming industry-wide collaborations, and leveraging their usage data and strong relationships with subscribers are the key ways for operators to ensure that they hold their ground in the messaging market.”
Industry-wide collaboration alongside innovation and realignment of revenue schemes to more social models will be the key to growth in the messaging realm according to Ovum’s report, which notes the development as an opportunity as well as a threat.
Telcos have the advantage of controlling the entire messaging structure (through access to the user’s phone number and usage data), billing relationship and most of the services to which the user is exposed.
Dharia goes on to say that the most important factor to future messaging revenue will be co-operation between the telcos themselves: “They are no longer competing merely among themselves, but must work together to face the challenge from the major internet players.”
“Working closely with handset vendors will also be important; they control some of the most popular social messaging apps, and can also provide preloaded applications.”
Image credit: EronsPics.