Despite of the widespread adoption of instant messaging services (MIM) from Over-the-Top (OTT) providers such as Whatsapp, Facebook, Viber, Tango telecommunications operators in Nigeria and across the globe will generate more than $100 billion from Short messaging Service (SMS) in 2014, according to a new report by Deloitte and accessed by BusinessDay.
This figure however is equivalent to approximately 50 times the total revenues from all MIM services. BusinessDay had exclusively reported that some Mobile Network Operators (MNOs) in the country were planning to block free OTT content services on smartphones, over growing concerns of revenue loss on international calls and text messaging. One industry analysts estimates that in 2013, MIM depleted SMS revenues by $32bn.
As it stands currently, MIM and SMS are likely to be regarded as direct competitors in 2014. But mobile operators need not to fret as the recent report suggests continuous flow of revenue from SMS.
The report entitled, ‘Technology, Media & Telecommunications Predictions 2014’ however expects that after 2017, revenues from SMS will begin to fall. Paul Lee, director, global TMT research leader, said at the launch of the report, Wednessday, that text messaging’s superior revenue-generating ability is due to three main factors: ubiquity, infrequency and price.
“If you think about what you require to use instant messaging, you will require a smartphone. In many markets in sub-saharan africa, though mobile is very ubiquitous, smartphones are not yet. If the government for instance wants to reach out to everybody, it would be through SMS because tha what everybody’s got,” stated Lee.
Deliotte also predicts that in 2014 MIM will carry more than twice the volume (50 billion versus 21 billion per day) of messages sent via SMS. This figure, according to the report, is a significantly greater ratio than in 2012, when 1.1 instant messages were sent for every text message. The current development, the report states might even suggest that the growth of MIM services is coming at the expense of SMS and telcos.
In spite of the burgeoning volumes of messages carried over MIM platforms, analysts at Deliotte expect mobile operators to generate more than $100 billion in 2014. MIM services may win the battle for volume in 2014, but SMS will indeed be victorious in global revenue terms. Deliotte expect SMS to continue to generate greater revenues than MIM even as far out as 2017.
By this point, global SMS revenue are expected to start falling. “We would also expect MIM services on mobile phones to continue as a substitute not just for SMS, but all other forma of communication, from e-mal to phone calls”, Lee further added.
But while MIM may be taking revenue from mobile operators in Nigeria, Africa’s largest economy, taking the form of lost revenues, it may also be driving demand for mobile broadband.
“And in 2014, revenues for mobile broadband may overtake SMS. While it s difficult to assign an exact value for the impact of instant messaging on the take-up of broadband, it is sizeable, and should become large still over time, as MIM services are used increasingly to send large audio and larger video files”, said the report.
Ben Uzor Jr
