About this Report
In 2011, the worldwide mobile messaging market was worth USD 202 billion. Serious money indeed. Not least because messaging provides the backbone of mobile operators' non-voice revenues.
A market of such impressive value obviously encourages heated competition and breeds innovation, making it both exciting and testing times for the mobile messaging space.
This is now the 6th edition of Mobile Messaging Futures, and since the last edition that we published in January 2011, there has been a huge shift in mobile messaging markets.
Clearly, one of the biggest themes under discussion in the mobile messaging industry in the second half of 2011 and now in early 2012 is this issue of 'the end of SMS' and the booming rise of Over-the-Top (OTT) messaging services (or 'next generation' messaging services, to offer just one of a great many aliases).
But is the 'SMS doom' scenario accurate, and - in reality - is the feared cannibalisation actually happening?
In addition to informed analysis of SMS, MMS, mobile e-mail, and mobile IM - and new sections on SMS Hubbing; and Mobile Marketing and Advertising - we have included groundbreaking five-year OTT User and Traffic forecasts in this new report.
And, yes - our OTT traffic numbers are huge. And very possibly still conservative. But such statistics mean little without detailed context and explanations, which we offer over the report's pages. Context that will help dispel the hype that seems commonplace in media reports, and explanations that will cut through the industry's misunderstanding about how OTT services are being used, and how popular they are.
That said, the underlying question (SMS vs. OTT) is a valid one.
Within the mobile space, messaging is the biggest revenue generator after voice. Within messaging, SMS is king and yielded the highest revenue for mobile network operators (MNOs) in 2011. And so fevered interest about changing market dynamics is understandable and relevant.
With these largely free or 'almost free' OTT messaging services seeing uptake, it is of course proper to assess precisely how pressing the concern is that the highest margin messaging service for operators (SMS) is being cannibalised by OTT services that are overwhelmingly yet-to-be monetised, and with usage thereof being largely beyond the control and influence of MNOs.
But, does a boost to one messaging type have to equate to a usage drop in another? Does it have to mean cannibalisation of SMS? What about synergy? Side by side traffic growth? And what of the other messaging mediums of MMS, mobile e-mail and mobile IM? After all, while messaging users love to communicate seamlessly, popular modes of communications do vary - and maybe OTT isn't a replacement, but rather just one more segment of the messaging mix.
This new 6th edition of Mobile Messaging Futures examines these issues and much, much more.
This exciting new market study looks at the worldwide mobile messaging market in twelve data-packed chapters:
- Worldwide Mobile Market
- Mobile Messaging Market
- SMS Hubbing
- Mobile Marketing and Advertising
- OTT Messaging Services
- Mobile E-mail
- Mobile IM
- Summary and Conclusions
- Appendices (including full glossary of terms)
So what of our contenders in the headline-grabbing SMS vs. OTT battle?
SMS, or text messaging, has established itself as the simplest and easiest means of personalised one-to-one communication - and has long been the most popular messaging service and has helped MNOs significantly offset the effects of falling voice revenue.
In recent years, OTT messaging services have gained momentum among mobile users owing to factors including an upsurge in smartphone penetration, adoption of advanced networks providing high-speed Internet access, discounted and unlimited data plans, and the uptake of apps.
And now SMS, which was once considered the most economical means of messaging, is being viewed by some consumers as one of the most expensive data services, and is being challenged by 'free' OTT messaging services - albeit with limitations of their own (which we will discuss). And of course, this is all set within the wider messaging context of the competing MMS, mobile e-mail and MIM services, and the wider-still mobile ecosystem.
Among the mobile messaging services scrutinised in this report, SMS yielded the highest revenue for operators in 2011 and mobile IM gathered the least.
SMS still rules the mobile messaging market in both traffic and revenue terms. SMS generated the highest revenue in 2011, and SMS revenue is forecast to dominate worldwide mobile messaging over the next five years to 2016. While MMS has maintained its position as the second most successful non-voice mobile service over the years, 2011 saw it fall behind mobile e-mail in revenue terms. Mobile IM generated the lowest revenue in the mobile messaging market in 2011 - but it will surpass MMS revenue by end-2016.
As discussed, SMS made the highest contribution to worldwide mobile messaging revenue in 2011 with a 63.5 percent share; in 2016, SMS will continue to lead other messaging services, but its revenue share (of the then USD 310 billion market) will have eroded to sub-50 percent.