08 December 2008

SMS Popularity To Continue Growing
As An Every Day Communication Channel

Text messaging is sure to continue to grow as an every day communication channel and it will continue to be the "cash cow of mobile data revenues for some time to come," according to a new report from Portio Research.

Mobile messaging is a fast growing and exciting industry, generating revenues of 130 billion USD worldwide in 2008, and this figure is set to rise to a market value of 224 billion USD by full year 2013. This detailed new report shows that SMS still accounts for the majority of that revenue, and SMS will remain the most dominant mobile messaging format for most of the next decade.

SMS has generated revenues of 89 billion USD in 2008, and the world has seen traffic of almost 3.5 trillion SMS messages in 2008. Our forecasts predict that SMS will become a 100 billion USD business by 2010, and worldwide total traffic will reach almost 5 trillion messages in FY 2011, and growth will continue from there.

Meanwhile, MMS is still the second highest revenue generating non-voice mobile service in the world, and in this report we argue that MMS has not failed, contrary to popular opinion, but MMS will be fighting to keep its place in the messaging mix over the next 5 years. In 2004, when SMS was booming and MMS was fighting hard to establish itself as a reliable format, the mobile industry was full of hype and misinformed expectations about the future of MS.

Everyone was saying MMS would be ‘the next SMS’, yet as the years passed, SMS continued to grow at a rapid pace, and MMS continued to lag in a distant second place. At that time, in 2004, SMS generated revenues of 30 billion USD worldwide. In 209, MMS will generate 31 billion USD worldwide, so finally, in 2009, MMS has become ‘the next SMS’, measured by 2004 values. Of course, SMS has grown to three times its original size in the intervening 5 years, but we believe it’s time to stop saying MMS has failed.

Among other highlights, report notes that regional differences will play a significant role in determining the success of messaging expansion into the web, advertising and social networking media, with factors like consumer type, payment preferences, message delivery method and usage all entering the equation.

It is interesting to see that Americans now send double the number of messages that Europeans average each month. Filipinos lead the industry with an average of 755 messages per subscriber each month and Chinese subscribers are hovering just over 100 messages a month. SMS is the messaging tool of choice everywhere but Japan where mobile email has surpassed the use of text messaging.