Report: Operators lost $13.9B due to OTT messaging

Mobile operators lost text messaging revenues of $13.9 billion in 2011, up from lost revenue of $8.7 billion in 2010, due to an upsurge in usage of social messaging services, according to research firm Ovum. This study looked into how IP-based social messaging is cutting into the profitable revenue streams generated by SMS and MMS.

"Social messaging has disrupted traditional services, and operators' revenues in this area will come under increasing pressure," says Neha Dharia, Ovum's consumer analyst and author of the report. "Tapping into the creativity of app developers, forming industry-wide collaborations, and leveraging their usage data and strong relationships with subscribers are the key ways for operators to ensure that they hold their ground in the messaging market."

While this new technique of messaging only represented 6 per cent of total messaging revenue in 2010 and 9 per cent in 2011, Ovum says that its impact on operators' positions within the messaging market is significant. The report calls for operators to work with the handset vendors so they can start to control some of the more popular social messaging apps, and can also provide preloaded applications.

Notable SMS challengers include Facebook Messenger, a free standalone messaging solution enabling iOS, Android and BlackBerry device users to correspond directly with their friends, as well as Vonage Mobile and Skype. Last year, Apple introduced iMessage, which enables consumers to send free text messages, photos and videos among all iOS devices.

The Ovum study warns that offering innovative messaging services and aligning revenue plans with models in the social world will not be enough to win the battle against social messaging. Industry-wide collaboration and co-operation will be the key to growth in the messaging realm.

 "The most important factor, however, will be co-operation between telcos," says Dharia. "They are no longer competing merely among themselves, but must work together to face the challenge from the major Internet players."

For more:
- see this Ovum release

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