Operator Revenue from SMS, MMS on The Decline

Operator Revenue from SMS, MMS on The DeclineOn the heels of new reports indicating that millions of consumers are adopting free social and messaging apps across iOS and Android at a record pace, today’s report and corresponding projections from  Strategy Analytics are far from shocking.

Global expenditure on operator messaging services, which includes SMS and MMS, declined for the first time in 2013 following its peak in 2012.

The revised Global Mobile Messaging Forecast from Strategy Analytics reveals that operator revenue from messaging services fell by almost 4 percent last year to just below $104 Billion.

Continued intense competition for subscribers between operators combined with the fast growing popularity of over-the-top instant messaging services like WhatsApp, Line Messenger and Tencent’s WeChat will drive a  20 percent fall in global operator messaging revenue by 2017.

David MacQueen, Director of Media & Apps at Strategy Analytics, says that while RCS/ RCS-e enables mobile operators both to evolve mobile messaging beyond SMS and MMS and keep operators relevant in mobile messaging, “it will not offset the current decline in messaging revenue. We forecast that by 2017 there will be just below 180 million users of RCS/ RCS-e based services. However, RCS/ RCS-e messaging will contribute little direct revenue for mobile operators. To offset lower consumer spend levels, carriers should aim to tap opportunities such as mobile marketing, or increase innovation by opening up SMS platforms to businesses and the developer community”

According to the same projection, the decline in messaging revenue will be more pronounced in regions with the greatest penetration of smartphones and data users, like North America and Western Europe, “where SMS and MMS expenditure will decline by 38 percent and almost 28 percent respectively.”