SMS to continue to grow at runaway pace

SMS will continue to be the star of data services with a new report indicating it will continue to grow with traffic volumes and revenues. 

The report by Portio Research said SMS growth will "continue to confound predictions" with global SMS revenues expected to reach $67 billion by 2012, driven by 3.7 trillion messages.

The research firm, however, said the growth of SMS revenues will not be as aggressive as the growth of SMS volumes due to declining prices. But apart from this, the report said SMS will remain to be a "phenomenal success as the cheapest, quickest and easiest to use form of peer-to-peer mobile communication."

It said: "Markets have continued to grow and greatly exceeded the predictions of similar research carried out in 2005. SMS traffic has not flattened out in mature markets but continued to boom while the US market has grown much faster than expected. The SMS market despite declining prices continues to be fuelled by new subscribers."

In Asia alone, the report said that for every five minutes in the next six years, 2,267 people will have bought their first ever mobile phone. "For the majority, these new handsets will offer little affordable functionality apart from basic voice and SMS services. This translates into an additional 1.4 billion new mobile subscribers in Asia alone with a consequent boom in SMS traffic in the region."

By 2011, the report predicted, mobile instant messaging (MIM), especially in markets such as North America, will supplant SMS as the mainstream messaging service as smartphones and wireless Internet proliferate. Operators, the report added, need to strike a balance between SMS and IM pricing in order to prevent the cannibalization of SMS revenues in the future.