Social messaging knocks €10b off SMS revenues

Mobile social messaging services cost the world's mobile operators $13.9 billion (€10.4 billion) in lost SMS revenue in 2011, research firm Ovum claims.
 
The decline represents 9% of total messaging revenue, and Ovum predicts the situation will get worse as the popularity of messaging apps continues to grow, unless operators rework their legacy services.
 
“Social messaging has disrupted traditional services, and operators’ revenues in this area will come under increasing pressure,” Ovum consumer analyst Neha Dharia warns.
 
Mobile social messaging is defined as any message service that doesn’t use SMS, MMS or email, and that is linked to a social network or features social components.
 
However, Dharia notes savvy operators can turn the threat into an opportunity by “tapping into the creativity of app developers, forming industry-wide collaborations, and leveraging their usage data and strong relationships with subscribers.”
 
The Ovum analyst believes operators still hold the strings, “because they control the entire messaging structure through their access to the user's phone number and usage data. The established billing relationship is a great advantage, as is the fact that operators control, to a great extent, the services to which the user is exposed.”
 
Operators should also be building up relationships with handset makers, and most importantly with each other, Dharia adds, noting that mobile operators “are no longer competing merely among themselves, but must work together to face the challenge from the major Internet players.”

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