Operators ignore SMS at their peril

The humble SMS will remain a significant source of revenues and traffic for mobile operators on a global basis until at least 2015, according to the latest forecasts from Informa Telecoms & Media. Global SMS revenues are forecast to rise to $136.9bn by 2015 from $105.5bn in 2010, as global SMS traffic increases from five trillion messages in 2010 to 8.7 trillion messages in 2015.

Although mobile operators are spending heavily on rollouts of LTE and other new technologies, leaving relatively little in the budget for messaging services, SMS should not be overlooked as a core service for mobile users, delivering in 2010, 80 per cent of data and messaging revenues.

In fact, argues Pamela Clark-Dickson, senior analyst at Informa, SMS will continue to be the most popular form of messaging for some time due to its low cost, universal access and interoperability across devices and mobile networks.

Although traditionally used by consumers, SMS is increasingly being used by government departments, banks and financial institutions, brands, retailers and transport providers for increasingly sophisticated purposes such as tickets, coupons, payments and loyalty programs. Its popularity in emerging markets as a banking and payment tool is also well documented.

Indeed, the types of services that are being delivered by SMS in emerging are playing a vital role in improving the economic and social well-being of mobile users and their families in these markets, said Clark-Dickson. Farmers can use SMS to receive weather reports, crop prices and information about fertilizers, and in so doing hopefully increase their crop yield and allow them to get the best possible price for their harvest. Meanwhile clinics can harness SMS to better manage their stocks of medication or to allow patients to check whether their medicines are fake, which will ultimately help reduce the spread of diseases such as malaria and HIV.

“The fact that SMS is the universal data communications channel on the mobile device is also a huge benefit for businesses and government departments in developed markets and, more recently, for social networks like Facebook and Twitter. By enabling SMS updates or alerts for their services, social networks, businesses and government departments can reach all mobile users, and not just the segment of users that owns a smartphone,“ said Clark-Dickson.