Global telecom operators are expected to have lost $23 billion in SMS revenues by the end of 2012 as smartphone users shift to free messaging applications, an industry report said on October 11.
Technology research company Ovum forecast the losses would more than double to $54 billion by 2016 as the traditional Short Messaging Service (SMS) gives way to Internet-based platforms such as WhatsApp.
This compares with estimated losses of $8.7 billion in 2010 and $13.9 billion in 2011. "Social messaging is becoming more pervasive and operators are coming under increased pressure to drive revenues from the messaging component of their communications business," said Neha Dharia, consumer telecoms analyst at Ovum. "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 revenue, and offer services to suit."
Ovum cited the increasing popularity of WhatsApp, which allows smartphone owners to exchange messages for free using wireless Internet links, bypassing SMS gateways that charge users per message or for a monthly quota.