SMS Accounted For 70% To 80% Of Worldwide Non-Voice Revenue - InformationWeek

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Commentary
4/26/2007
04:52 PM
Eric Ogren
Eric Ogren
Commentary
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SMS Accounted For 70% To 80% Of Worldwide Non-Voice Revenue

According to a new report from Research and Markets, short message service, or text messaging, was a cash cow for network operators in 2006. But with the recent trend to offer unlimited messaging bundles, has SMS become commoditized?

According to a new report from Research and Markets, short message service, or text messaging, was a cash cow for network operators in 2006. But with the recent trend to offer unlimited messaging bundles, has SMS become commoditized?Regular voice calls still add up to 80% of mobile revenues across the globe, but SMS alone accounted for about three quarters of the rest. That doesn't leave all that much room for other non-voice services, such as picture messages, video messages and ringtone downloads. I don't think that sort of revenue contribution will continue to be possible for long given Verizon Wireless' and AT&T/Cingular's recently announced unlimited messaging bundles. By commoditizing the service, as the carriers did by offering huge buckets of messages each month, the price and revenue of those services will decline rapidly.

That leaves the network operators with the task of finding new ways to make up that revenue.

Picture messaging may have gotten off to a slow start, but North Americans finally appear to be snapping away with the camera phones and sending the pictures to their family and friends. In fact, MMS traffic in North American and Europe has picked up nicely.

One potential source of revenue on the data side of the fence is mobile email. While only truly utilized by business and prosumer users, convincing regular consumers to adopt mobile email services for regular added monthly fees is certainly on way to bring in some more money.

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