Gartner sees the SMS levels exploding

Asia Pacific leads worldwide SMS messages and is expected to top 1.8 trillion in 2010

Wireless messaging is the most successful mainstream mobile data service to have emerged during the 30-year history of the cellular telecom industry.

New research from Gartner shows that an estimated 936 billion messages were sent worldwide in 2005 via the Short Message Service (SMS). Gartner predicts this will reach 2.3 trillion by 2010.

By far the most messages will continue to be sent in the Asia-Pacific region, where Gartner predicts the level of SMS messages will top 1.8 trillion in 2010.

North America will see the biggest compound annual growth rate (CAGR) between 2006 and 2010. Gartner predicts that 318 billion SMS messages will be sent in 2010, making SMS volumes in North America the second highest worldwide. SMS levels in Western Europe will grow at a slower rate, as penetration and usage patterns peak, and are predicted to rise to 213 billion in 2010.

Faced with declining margins on basic cellular voice and text services, as well as lackluster demand for other data applications, mobile operators are now revisiting wireless messaging in an effort to build on the success of SMS.

According to Nick Ingelbrecht, research analyst at Gartner: "Nobody could have predicted the phenomenal success of SMS, and the race is on to find its successor. Without a doubt new services are needed, but a clear leader has yet to emerge from the messaging services currently being deployed, such as mobile instant messaging (IM), video messaging, mobile e-mail and unified and integrated messaging."

Ingelbrecht says that the main barriers to consumer adoption of new messaging services are device configuration, service set-up and usability, and that carriers will need to address these issues in their service planning. He also highlights the importance of pricing and pricing plans: "Simple, all-inclusive pricing bundles are well worth considering, although the perceived value of the total package will usually be more important than price alone."

Providers hoped that MMS would tap into existing demand for text messaging by adding multimedia services for which subscribers would pay a premium. Whilst MMS has started to generate meaningful revenues for some carriers, market prospects for the current range of multimedia products remain limited, with volumes only predicted to grow from 8.3 billion worldwide in 2005 to 47.4 billion in 2010. Gartner largely attributes this disappointing lack of adoption to interoperability, usability and pricing issues.

Mobile IM combines the ubiquitous availability of SMS with presence (that is the ability to know whether the other correspondent is present or not) and has long been viewed as a highly attractive opportunity in the consumer wireless market. For users, growth has been hindered by the complexities of service set-up, device configuration, usability and (not least) integration with existing online IM user IDs.

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