Ovum estimates that operators lost $13.9bn in 2011 due to social messaging
New estimates from Ovum indicate that consumersâ€™ increasing use of IP-based social messaging* services on their smartphones cost telecom operators $8.7bn in lost SMS revenues in 2010, and $13.9bn in 2011.
In a new report**, the independent technology analyst reveals that it expects the decline, representing nearly 6% of total messaging revenue in 2010 and 9% in 2011, to continue as the popularity of messaging apps continues to grow. Ovum warns operators to rework their legacy services if they want to secure their future position in the messaging market.
â€śSocial messaging has disrupted traditional services, and operatorsâ€™ revenues in this area will come under increasing pressure,â€ť says Neha Dharia, consumer analyst at Ovum and author of the report. â€śTapping 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.â€ť
However, despite the threat to messaging revenues, Ovum believes that the strong presence of social messaging should be looked upon as an opportunity. â€śThis threat will drive telcos to consider alternative sources of revenue, such as mobile broadband. And now the market has been tested, operators know what types of messaging services work,â€ť comments Dharia.
â€śIn 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.â€ť
However, offering innovative messaging services and aligning revenue schemes with models in the social world will not be enough to win the battle against social messaging. Industry-wide collaboration and co-operation will be the key to growth in the messaging realm.
â€śOperators must remain open to partnering with app developers, sharing end-user data with them and allowing integration with the user’s social connections. 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. The most important factor, however, will be co-operation between telcos. They are no longer competing merely among themselves, but must work together to face the challenge from the major Internet players,â€ť concludes Dharia.
NOTES TO EDITORS
*Ovum defines social messaging as messaging that occurs through platforms other than SMS, MMS, or email, and which is either tied to a social network or has a social component attached. Social messaging players include mobile apps, mobile social networks, and even some mobile instant messaging platforms.
** The Casualties of Social Messaging
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