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$230 Billion SMS Market To Peak in 2015 and Decline As Data Takes Over

The mobile messaging market was worth $218 bn in 2012 and is expected to grow 5.5% year on year to reach $230 bn in 2013, according to a new report.

Among the four messaging services covered in the report, SMS was the highest revenue earner in 2012, said the Mobile Messaging Futures 2013- 2017 published by Portio research.

Fig 1

The research firm forecasts that revenue from mobile messaging will peak in 2015 and start declining after that. The decline will start from North America, spread to Europe by 2016 and rest of the world by 2017, said the report.

Growth of SMS

Fig 2

  • SMS Traffic reached 100 billion from .5 billion in 2 years (1996-1999)

  • Over the next four years (1999-2003) SMS traffic increased to 450 billion

  • In another 2 years (2003-2005) traffic breached one trillion mark

  • SMS traffic crossed the 5 trillion mark in 2009

  • SMS traffic peak in 2015- 8.3 trillion messages

Fig 3Key drivers that will maintain growth from 2011-15 is growing mobile subscriber base especially in developing economies such as Asia, Africa, Latin America and the Middle East. The decline will begin from the mature markets where smartphones are increasingly popular.

This year, sms is expected to generate $15.3 mn per hour for operators while OTT messaging services like Whatsapp will generate $2.6 mn per hour, mostly in the form of data usage charges.

Data Growth for Indian Telcos

Indian telecom operators have been seeing an upswing in the number of data customers in the recent quarters. In July, Vodafone said that data usage on its network in India increased 29% for the first quarter of FY14 as compared to the previous quarter. Vodafone has 41.2 mn data customers out of which 3.7 mn are on 3G.

Meanwhile, Airtel said it has 46.6 mn mobile internet consumers out of which 6.8 mn were on 3G in the same quarter. Data consumption on Airtel networks grew 117% compared to previous year.

According to the latest quarterly filings by Reliance Communications, it has grown the number of 3G subscribers to overtake Airtel’s 3G customer base. As on June 2013, Reliance Communications has a total subscribers base of 125.7 million of which only 31.1 million are data subscribers and out of theses 7.7 million are on a 3G connection.

Full report here (pdf).

Hat tip Exotel

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