SMS revenues to hit $67bn by 2012

Johannesburg, 20 Feb 2007

While the growth of SMS revenues will not be as aggressive as the growth of SMS volumes due to declining prices, revenues will enjoy strong growth, according to a new Portico Research report.

The research also indicates SMS is in danger of being supplanted by mobile instant messaging (MIM).

The report, "Mobile Messaging Futures 2007-2012", states that by 2012, global SMS revenues are expected to reach $67 billion, driven by 3.7 trillion messages.

"SMS continues to be a phenomenal success as the cheapest, quickest and easiest to use form of peer-to-peer mobile communication," Portico says in a media statement.

Markets continued to grow and exceed the predictions of similar research undertaken in 2005, it says.

SMS traffic has also not flattened out in mature markets, but continued to grow, with the US market growing faster than expected. The SMS market growth is fuelled by new subscribers and continues to grow despite declining prices, the report states.

MIM threat

The Portico report indicates MIM, especially in markets such as North America, will supplant SMS as the mainstream messaging service by 2011.

While local research house BMI-TechKnowledge does not go as far as predicting SMS would be supplanted in SA, its research also shows MIM poses a strong threat to SMS.

BMI-T senior analyst Tertia Smit says pressure on SMS will increase between 2006 and 2011 due to the growing adoption of MIM, MMS and push-to-talk.

However, she adds that SMS growth will continue to play a strong role in mobile data growth, which is set to triple by 2011.

"Cellular operators need to strike a balance between SMS and IM pricing in order to prevent the cannibalisation of SMS revenues in the future," Portico says.