Saturday, March 3, 2012

Social messaging cost carriers $14 billion in SMS revenue last year

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CNET News The Digital Home Social messaging cost carriers $14 billion in SMS revenue last year Don Reisinger by Don Reisinger February 22, 2012 8:24 AM PST

That's the claim made by research firm Ovum, which added that carriers lost $8.7 billion in SMS revenue in 2010 because of social messaging.

Is iMessage hurting SMS revenue? You better believe it.Is iMessage hurting SMS revenue? You better believe it.

(Credit:Screenshot by Jason Cipriani/CNET)

It's no secret SMS is wildly popular, but according to a new report from research firm Ovum, carriers around the world lost quite a bit of revenue last year after mobile phone owners turned to other services to chat with friends.

The research firm revealed yesterday that carriers lost $13.9 billion in SMS revenue in 2011 due to consumers chatting with friends on social-messaging applications. Those applications range from everything from Facebook's mobile app, which features chatting, to instant-messaging apps. Apple's iMessage is also included in that list.

It was a similarly disappointing year for carriers in 2010, when Ovum estimates they lost $8.7 billion at the hands of social-messaging applications.

"Social messaging has disrupted traditional services, and operators' revenues in this area will come under increasing pressure," Ovum consumer analyst Neha Dharia said yesterday in a statement. "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."

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Still, it's hard to feel bad for carriers. According to Ovum, the 2010 and 2011 losses represented just 6 percent and 9 percent of total SMS revenue those years, respectively.

Wondering how carriers can make so much on SMS? TheCTIA reported in October that during the first six months of 2011, in the U.S. alone, Americans sent out 1.14 trillion text messages.

Posted by Ambar jaiswal at 11:07 AM
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