 Mobile Messaging Growth
Nitesh Patel, Senior Analyst, Strategy Analytics
February, 2008
Mobile messaging will continue to remain an essential revenue stream for network operators moving out to 2011. Globally, Strategy Analytics estimates end user spend on mobile messaging reached $77 Bn at the end of 2007, projecting this to rise to $111 Bn by 2011 as cellular penetration rapidly expands in developing and emerging markets. Revenue from SMS and MMS will remain core revenue components contributing 65% and 13% respectively in 2011.
Figure 1: Global Cellular Messaging Revenues 2007 -2012 Demand for high capacity, low cost SMSC’s will continue as the global cellular population rises over 50% from just above 2.5 billion at the end of 2007 to almost 3.9 billion by the end of 2012.
Network effects will lead to significant increase in SMS volumes. For instance both China and India have witnessed hyperactive levels of growth in message volumes in just a short period of time. In India SMS volumes expanded almost 700% from just over 2 billion during 1Q 2005 to over 16.5 billion in 3Q07, while the cellular population increased 200% across the same period.
It is imperative that the SMS solutions adopted by carriers in growing cellular markets can minimize message delivery costs in order to deliver margins and faster ROI in low GDP territories.
In mature cellular markets, where revenues from SMS are beginning to plateau, and in some cases fall, operator demand for replacement of higher cost legacy messaging infrastructure will also increase.
Strategy Analytics also anticipates increased growth in demand for MMSCs, as MMS volumes rise over 190% from 20 Bn at the end of 2007 to almost 59 Bn by end 2011.
Overall there is strong evidence of increased customer usage of MMS. Total MMS volumes at China Mobile have increased significantly in the last year with total P2P (person-to-person) and A2P (application-to-person) volumes exceeding 14 billion in 2007. We believe that 70% of total volumes are being stimulated by China Mobile’s ‘Mobile Paper,’ a news and infotainment service, which has 18 million paying subscribers. However, we anticipate rising A2P MMS use to catalyse growth in P2P MMS.
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