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Global consumer expenditure on operator messaging services, which includes SMS and MMS, has peaked in 2012 and will begin to decline. According to the latest "Global Mobile Messaging Forecast" from Strategy Analytics (www.StategyAnalytics.com), consumers will increase their spending on SMS and MMS by just 2.5% this year.
Intense competition between operators combined with the growing popularity of over-the-top instant messaging services like WhatsApp, Kik, Line Messenger and Tencent’s QQ will drive a 12% fall in global consumer spending on operator messaging revenue over the next five years, according to the research group.
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 18% and almost 25% respectively.
"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," says Nitesh Patel, senior analyst, Strategy Analytics. "Growth in US text message volume fell to 9% in 2011, significantly down from 30% in 2010. In 2011 both T-Mobile USA and Verizon Wireless noted low single digit growth in total messaging revenue."
The research group believes mobile operators must act on a number of fronts in order to mitigate the decline in messaging revenue.
"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," says David MacQueen, director, Wireless Media Strategies, Strategy Analystics. "We forecast that by 2017, 293 million users of RCS/ RCS-e based services will generate $370 million in revenue for mobile operators. To offset lower consumer spend levels, carriers should aim to tap new opportunities such as mobile marketing, or increase innovation by opening up to the developer community."
