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Transform to the power of digital
Trends in Mobile Messaging – quick scan
May 2012
Capgemini Consulting TME Netherlands
Copyright © 2012 Capgemini Consulting. All rights reserved.
Declines in the growth of the number of SMS sent and SMS revenues are forecasted over the next four years
Global SMS revenue ($billion)
Over the next few years, mobile operators will
no longer be experiencing the high sms revenue growth that it had achieved between 2005 and 2010
This decline will be most pronounced in developed markets
137
106
75
2005
+30%
+41%
2015 2010
Number of Global SMS sent per year (trillion)
A significant decline in the growth of SMS sent will be noted over the next few years, which will significantly impact the revenues of most mobile operators
8,7
5,0
0,7
2015
+74%
+646%
2010 2005
Source: www.juniperresearch.com; www.irma-international.org; www.opengardensblog.futuretext.com
Copyright © 2012 Capgemini Consulting. All rights reserved.
Breakdown of global messaging revenues
Although SMS will still remain high source of revenue for operators, its contribution to total messaging revenue will decline as IM, Email and MMS continue to grow
By 2015, SMS is forecast to contribute 68% of mobile messaging revenues, as opposed to the 80% during 2010
Source: Informa Telecom and Media
8%
11%
8%
100%
IM
MMS
SMS
2015(f)
13%
68%
2010
4% 8%
80%
Forecasted breakdown of traffic (2015)
Even though IM will be constituting the bulk of the
messaging traffic (33% of the total messaging traffic), it is forecast to only contribute 8% to the total messaging revenues for mobile operators
33,0%
MMS
5,0%
21,0%
IM
SMS 41,0%
Copyright © 2012 Capgemini Consulting. All rights reserved.
Another research company, Allot, further supplemented Ovum’s predictions, using traffic generated by around 250 million mobile users
The data showed that messaging is migrating from cellular to internet based world, with facebook chat and whatsapp being major players in this migration
IM Application bandwidth share
Ovum analyst using advanced prediction models, estimate that mobile operators have lost approximately $13 billion in potential sms revenue as a result of the rise in instant messaging
This trend in lost sms revenue is anticipated to continue as smartphone penetration continues to rise
According to Ovum, mobile operators lost more than $13billion in annual revenues due to the rise of mobile messaging applications like Whatsapp and Facebook chats
Other IM
15,0% ICQ
1,0% Google talk
5,0%
QQ 8,0%
Windows live
14,0%
Yahoo mesenger
17,0%
Whatsapp 18,0%
Facebook chat
22,0%
Loss of SMS revenue as a result of substitution (2011)
13150
Lost revenu Global SMS revenu
137
Potential SMS revenu
This is potential sms revenue that
was lost as a result of IM messages
Source: Informa Telecom and Media; www.theregister.co.uk
Copyright © 2012 Capgemini Consulting. All rights reserved.
Facebook and WhatsApp are growing in leaps and bounds and capturing a significant share of the SMS market
Source: Ovum; www.ft.com; company websites; www.zdnet.com; http://www.cnet.com.au
WhatsApp Messenger is a cross-platform mobile messaging app available for iPhone, BlackBerry, Windows Phone, Android and Nokia
The company was launched in 2009, and within a
year had managed to have approximately 1 million users. Their subscriber base is estimated to have grown to tens of millions
The ability to send messages between any kind of smartphone gives WhatsApp an advantage over Blackberry messenger and Apple’s iMessage, which are restricted to owners of similar devices
In February 2012, it was estimated that WhatsApp users generate 2 billion messages sent each day, an increase of 1 billion per day from October 2011,
Facebook has 920 million users, and over 425 million access the site from their phones
It is said that Facebook probably transports more mobile traffic, number of messages and time spent online than the world's largest operator
In August 2011, Facebook messenger was initially released for Android ad Iphones, and the blackberry version was introduced in October 2011.
Facebook Messenger is considered the best alternative to SMS for three reasons:
― With over 901 million monthly active users most individuals are easily reachable
― it’s cross-platform (not limited to only just mobile
― and it is regularly getting significant upgrades, video calling is anticipated to be released soon
Copyright © 2012 Capgemini Consulting. All rights reserved.
Differing reactions to the cannibalisation of sms revenues by IM applications have been noted from the key players affected
Telefonica KPN
• In response to the rise in IM application, Telefonica has recently
launched TU me , an integrated, smart over-the-top (“OTT”)
messaging service
• The application enables one to send text messages, voice
messages, photos, location information and even make calls
through the App
• It is initially available on iphones only and it is not restricted to just
Telefonica customers
• At their financial report back of the Q1 2011 results, KPN reported a
10% y-o-y drop in sms revenues
• The company contributed the fall in SMS and voice traffic and
revenues to the increased use of messaging applications on smart-
phones
• It was rumoured that the mobile operator intends to introduce
separate tariffs for IP-based services such as voice-over-IP, instant
messaging and streaming video, according to local media reports
• This move was quickly curtailed by the regulator through the
introduction of the net neutrality law
Mo
bile
op
era
tors
Mobile Messaging Application developers Regulators
• WhatsApp co-founder believes that their application is no threat to
mobile operators and does not impact on their revenues
• “I view it from the perspective that we‟re facilitating a broad
movement to data plans and the entities that provide those plans
are the carriers, so they stand to benefit quite substantially. It‟s all
about the data “ he added
• The EC has not gone so far as to define „net neutrality‟ in telecoms
legislation to come into force 25 May 2011 , in order to curb
attempts by operators to block certain applications
• European telecoms regulators will be required to “promote the
ability of Internet users to access and distribute information or run
applications and services of their choice”.
• The Commission also stated that it needs to gather more
information with regards to the de facto blocking of certain services
by operators as a result of charging their subscribers more to
access these services.
Oth
er
key
pla
yers
Source: Informa Telecoms and Media; Reuters; www.mobileindustryreview.com/
Copyright © 2012 Capgemini Consulting. All rights reserved.
Mobile operators still have the opportunity to maximise revenues from application-to-person (A2P) SMS services
The rise in instant messaging applications will lead to a reduction in person-to-person sms, as consumers increasingly start using these applications
However Application-to-person will to continue to increase
Application-to-person (A2P) messaging include financial services, advertising, marketing, business administration, ticketing, television voting and any other service where information needs to be sent to, or received from a large number of users in text
SMS will remain the preferred method for A2P ― Universal access – not restricted to just smart
phones ― Interoperability across devices and mobile
operator networks, ― Ease of use, ― Reliability, and ― Low cost
Key notes
Breakdown between P2P and A2P (2016)
Source: www.irma-international.org; www.juniperresearch.com
15%
51%
49%
2004
100%
A2P
2015(f)
P2P 85%
