Feature Article

October 08, 2012

SMS and MMS Operator Revenue to See Big Decline by 2017

Text messaging has long been the preferred form of communications among most of the younger generation. There was a time when SMS and MMS texting was one of the most lucrative ways a business could bring in revenue. Now, a new study by Strategy Analytics shows that operator messaging is going to peak at the end of this year and then begin a steady decline going forward. 

Operator messaging is expected to increase by just 2.5 percent by the end of 2012 and then will apparently dip by as much as 12 percent over the next five years. These operating messaging SMS and MMS services are being put on the back shelf by over-the-top messaging applications such as Kik and WhatsApp.

According to the new research, the drop in business from operator messaging will be the most noticeable in North America and Western Europe, where smartphones have managed to make huge inroads. The study says that in these regions and others where smartphones are prevalent SMS and MMS messaging revenue could actually drop by as much as 18 to 25 percent by the end of 2017. 

Image via Shutterstock

Nitesh Patel, a senior analyst with Wireless Media Strategies (WMS), said in a recent statement that, “The impact of smartphone messaging applications, both from smartphone vendors Blackberry and Apple, and independent messaging applications like Kik, is hitting operator messaging volumes and messaging revenue in the US. Growth in US text message volume fell to nine percent in 2011, significantly down from 30 percent in 2010. In 2011 both T-Mobile USA and Verizon Wireless noted low single digit growth in total messaging revenue.”

Strategy Analytics is suggesting that companies that are going to be suffering from these massive declines should be on the lookout for new ways to make up for the lost revenue. One avenue the company suggests is increasing their devotion to mobile marketing. The research firm also believes that these companies should open up the developer market and look for new innovation in that field.

Edited by Brooke Neuman

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