Social messaging cost CSPs $14b in 2011

Dylan Bushell-Embling
23 Feb 2012

Mobile social messaging services cost the world's mobile operators $13.9 billion in lost SMS revenue in 2011, according to a new report.

This decline represents 9% of total messaging revenue, according to Ovum, up from 6% in 2010. And the situation is set to worsen as the popularity of messaging apps continues to grow.

“Social messaging has disrupted traditional services, and operators’ revenues in this area will come under increasing pressure,” report author Neha Dharia warned.

Mobile social messaging - defined as messaging occurring through platforms other than SMS, MMS and email, which is also either tied to a social network or has a social component attached – is gaining increasing traction with consumers.

Dharia said operators need to rework their legacy services if they want to secure their future position in the messaging market.

But despite the threat to messaging revenues that social messaging services pose, Dharia said mobile operators should view the growing popularity of these services as an opportunity.

“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,” Dharia said.

“In addition, operators are in a position of strength because they control the entire messaging structure through their access to the user's phone number and usage data. The established billing relationship is a great advantage, as is the fact that operators control to a great extent the services to which the user is exposed.”

Operators should also be building up relationships with handset makers, and most importantly with each other, according to Dharia.

“Mobile operators] are no longer competing merely among themselves, but must work together to face the challenge from the major Internet players.”

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