Consumer embrace of these free or low-cost services, especially among younger users, points to less reliance on SMS text-messaging, long a cash cow for carriers. Consider that WhatsApp is now processing 27 billion messages a day across its global user base of 200 million.
“For a significantly small fraction of the cost, WhatsApp moves around more messages than every single telecom operator on the planet,” wrote telecom consultant Chetan Sharma, in his first-quarter report on the worldwide mobile market.
Continuing, he noted: “SMS will stay relevant for the foreseeable future, but the growth is in IP communication. We will also see more cooperation between the IP app players and the operators as they find common strategic grounds.” Whatsapp itself has signed deals with many operators internationally as it seeks to make further inroads on SMS.
A separate study released Thursday by London-based telecom research firm Analysys Mason, however, suggests carriers should stay the course with SMS since IP-based messaging services have not yet completely overtaken their traditional business.
“Operators should continue to embed the use of SMS in customers’ behaviour, particularly with younger users, by offering unlimited messaging plans,” stated analyst Stephen Sale.
The Analysys Mason report -- “The Connected Consumer Survey 2013: Voice and Messaging” -- emphasized the heavy adoption of messaging apps by those in the 18-34 demographic in Europe and the U.S. More than 40% use IP-based messaging compared to only 20% of those 65 and over. But 91% of the 18- to-34-year-olds still also use SMS.
Sharma pointed out that U.S. operators are already taking steps to offset the expected decline of SMS use with new initiatives outside their historic business lines. These include AT&T’s integrated Digital Life offering for the home, Verizon’s efforts in health and public safety, and Sprint’s expansion into mobile advertising and analytics.
Sprint and Time Inc., for instance, last month struck a wide-ranging content and advertising deal with Time Inc. that involves use of the carrier’s Pinsight Media+ ad-targeting service. The Chetan Sharma report said that U.S. mobile data revenues in the first quarter grew 14% from a year ago to over $21 billion, with that total expected to reach $90 billion this year.