Operator messaging revenues have definitely peaked, declining for the first time in 2013 and continuing on a downward trajectory, new research suggests.
Strategy Analytics estimates that messaging revenues fell nearly 4% last year to just under $104 billion, due to continued intense competition among mobile operators and from OTT providers.
The research firm expects operator messaging revenues to slump 20% by 2017. The decline will be most pronounced in markets with the greatest penetration of smartphones and data users, including North America and Western Europe.
“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,” said Nitesh Patel, director of Wireless Media Strategies (WMS).
“While SMS volumes remained flat in 2013, operator revenue from messaging declined by almost 4%.”
Cellcos should be taking action on a number of fronts to address the decline, including pursuing partnerships with OTT players and bundling SMS into integrated price plans, Patel said.
“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.”