2013 will be the last year that SMS brings in the largest proportion of non-voice revenues
Large number of partnerships between operators and OTT players expected this year
RESEARCH firm Ovum has forecast that social messaging apps will cost operators US$32.6 billion in 2013, growing to over US$86 billion in 2020, with pace in the space picking up this year.
Neha Dharia (pic), consumer analyst at Ovum, said that SMS growth rates fell from 14% in 2011 to 8% in 2013, and SMS revenues have fallen since the emergence of social messaging.
She added that after 2013, mobile broadband revenues will form the bulk of operators’ non-voice revenues (contributing 43% of revenues in 2014) and will outpace revenues from SMS, with messaging forming a smaller proportion of data revenues (40% in 2014).
The bundling of SMS with calling minutes and mobile broadband plans has also contributed to the decline of messaging revenues.
“This year will be the last year that SMS brings in the largest proportion of non-voice revenues, and by 2015 SMS revenues will begin to plateau,” she added.
Dharia also noted that social messaging is proving to be an anchor for mobile content services -- it creates stickiness and delivers a high level of engagement, which enables services such as Facebook to grow their mobile footprint.
On the operator side, Singapore’s Singtel and Indonesia’s Telkomsel have launched own-branded social messaging apps to compete in the increasingly overcrowded social messaging market.
The period 2013-15 will be especially crucial in terms of the relationship between telcos and OTT players in the communication space and Ovum expects to see partnerships in this area intensify this year.
“The competition will intensify in 2013, and we will see a large number of partnerships between operators and over-the-top (OTT) players. Traditional mobile messaging in the form of SMS will continue its steady decline, leaving social messaging as the future of mobile messaging,” she said.
WhatsApp already has a number of operator partnerships, including a roaming pass with three in Hong Kong and the GSM-based service offered by Reliance Communications in India.
Facebook has a long history of working with operators, and its new partnership with 18 global operators will allow free or discounted data access to the social network’s messaging platform.
Social messaging player Viber’s CEO has stated that the company will be happy to share revenues from paid services once it begins to charge consumers.
Most social messaging services are currently either free or based on discounted plans, however the research firm expects the move toward content platforms to continue. Social messaging’s viral growth, high level of engagement and sticky nature makes it a strong foundation on which to build a content platform.
“In 2013 we will also see a large number of social messaging companies begin to grow into content platforms. KakaoTalk and Line already have growing revenue streams from games, emoticons and marketing channels, while social gaming service DeNA has introduced a messaging service, Comm, to anchor its existing gaming platform,” said Dharia.
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