Gartner sees the SMS levels exploding
- 14 December, 2006 09:23
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.
Some operators have decided to host existing IM clients on their networks, others have opted to develop proprietary mobile IM services and to try to build user communities that will drive usage and traffic. However, these are mainly in developing markets, where PC penetration and Internet use are fairly low.
Despite consumers' persistent lack of interest in video telephony and photo messaging, operators are hopeful that they will have more success with video messaging. The idea behind this service is that a mobile user on a voice call can simultaneously send live video of what they are looking at to the person on the other end of the phone.
While there is a certain novelty value to such services, Gartner believes that they are unlikely to become a big revenue generator. Working with vendors, carriers will first need to offer a service that is simple and easy to configure and use.
Services for consumers have been relatively slow to take off outside Japan. RIM's BlackBerry has seen some success in all geographies, but it addresses business users. Usability and the pricing of services have been the major obstacles to wider consumer adoption. Even among enterprises, the number of users remains small, and the market is still somewhat elitist, due to the total cost of ownership (TCO) of supporting wireless email users.
In the public e-mail space, Gartner expects that the majority of Internet e-mail providers will soon support simple wireless access to their accounts, using quasi-standard technologies such as browsing, SyncML and MMS, which allow them to serve a wider range of devices. While carriers will be able to continue to sell data plans for secure enterprise-based e-mail services, consumer e-mail is likely to be absorbed into existing data subscriptions.
Carriers have traditionally viewed unified messaging (UM) services as voice-messaging services, but are progressively looking to offer UM as a central repository for MMS, SMS, voice mail, e-mail and video traffic.
Gartner believes that the need to integrate communications options with Personal Information Manager (PIM) functionality is especially important in mobile applications, because it simplifies challenges of navigating between screens and functions.
According to Stephanie Pittet, principal research analysts at Gartner, due to the plethora of services under evaluation, we should not expect one single winner to emerge, but rather a mixture of several applications.
She says: "The most important issue for carriers to solve is the convergence of the various wireless messaging services onto a single carrier platform with an integrated user-interface that provides ready access to all messaging applications."
Above all, Gartner stresses that operators must focus on making the services as intuitive and accessible as possible to the consumer. "Mobile operators and vendors should invest in educating customers on how to use new messaging services. This is critical for service adoption, and can give a competitive advantage to those companies prepared to reach out to mobile users," says Pittet.