A study, jointly conducted by Financial Times and Informa, reveals WhatsApp and Apple’s iMessage have overtaken the text message substituting SMS. It said the OTT messaging will be more than double to 41 billion per day this year, which will be more than twice the number of text messages to be sent. It will impact more than $120 billion text message business in 2013, said Financial Times.
This had “a significant impact on mobile operators’ traffic and revenues in some countries, including Spain, the Netherlands and South Korea”. For example, text revenues in Spain have fallen from €1.1bn in 2007 to €758.5m in 2011 as traffic declined from 9.5bn messages in 2007 to 7.4bn in 2011.
“I think killing text messaging is going to be inevitable as people switch to [mobile] data plans,” said Ted Livingston, chief executive of Kik, which claims 50m registered users and raised $19.5m in venture capital funding last week. “If I can get something that is just as good for free, rather than paying for it, I’ll probably take it for free.”
Mobile operators are betting on 4G networks to fight back the apps through bundling voice, text and data packages, and with hopes that the arrival of superfast 4G networks could allow premium prices to be restored to an industry accustomed to long-term revenue decline for traditional business.
In another report, the FT has explained how large carriers like Telefónica, Vodafone and France Telecom have set up digital arms to create their own instant messaging and voice over internet services, but are aiming to win back customers with enhanced functionality and improved performance.
Global SMS traffic will continue to grow overall, according to Informa, owing to the varied speed of adoption of these services. But instant messaging will grow much faster – and this is the reason that mobile operators are slowly introducing ways to defend their customer bases.
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Abu Saeed Khan
In response to the findings, EU Digital Agenda commissioner Neelie Kroes tweeted: “It’s official: chat apps have overtaken SMS globally. The cash cow is dying. Time for telcos to wake up & smell the data coffee.”