Mobile operators will lose US$54 billion in SMS revenue to smartphone ‘social messaging’ apps by 2016, according to Ovum.
Over-the-top (OTT) services such as WhatsApp use 3G and Wi-Fi networks to transmit messages, rendering SMS messaging less relevant. Ovum estimates that operators will have lost US$23 billion in SMS revenue by the end of 2012 alone.
Ovum said the rapid increase in OTT players shows that social messaging is not a short term trend but “a shift in communication patterns” that will be driven by increasing smartphone and mobile broadband penetration and the rise of smaller players.
The analyst firm predicts that the trend will hit operators in Europe and Asia Pacific particularly hard and recommends that they collaborate with handset manufacturers to “remain relevant and competitive in the messaging industry”.
“Operators need to understand the impact of social messaging apps on consumer behaviour, both in terms of changing communication patterns and the impact on SMS revenues, and offer services to suit,” said Ovum consumer telecoms analyst Neha Dharia.
Although there are industry initiatives to tackle the issue, such as the GSMA’s Rich Communication Suite platform, Ovum claims the fact this won’t reach "mass-market" until 2014 means operators must use innovative pricing, partnerships and operator-branded IP messaging services to meet changing demand until then.