IM and Social Media killing mobile operators' SMS traffic and revenue?

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Short Message Service (SMS) is a basic service that is supported by every GSM phone manufactured. As such, it has become ubiquitous and so a strong source of income for mobile network operators.

In recent years, we have seen the rise of instant messaging and social media services such as Yahoo Messenger, 2Go, MXit, Eskimi, Skype, BBM, Facebook, WhatsApp, and Twitter, among others. Millions of people worldwide use these services – especially for their everyday basic communications.

It is easy to see how WhatsApp, BBM and Skype are eating into operators’ revenues, as they clearly take some traffic away from both SMS and voice. What may not be so obvious is the fact that Facebook messages and Twitter Direct Messages are being used in place of SMS by lots of people – and the trend is growing.

With SMS, the subscriber is billed for every message sent. In using social media and instant messaging services, the subscriber is billed a very minutes amount, because the services run on packet data e.g. GPRS, EDGE, 3G, 3.5G, 4G, etc. At times, several messages do not amount to anything more than N1.00. It is great cost-savings for the subscriber, but conversely also significant revenue loss for the operator.

As far as I can see, there is no way around it. This trend is the future. Communications will largely be routed via packet data. Who knows? Even SMS may eventually function that way, if the operators wake up to the realities on ground and embrace it.

Do you use any instant messaging service regularly in place of SMS? Do you use any in place of mobile telephony? How about messaging via social media?

Do share your experiences.

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22 comments

  1. i rarely use sms services. Etisalat gives 20 free SMS daily but I don’t use it at all. My bro uses Etisalat too. I will rather message him on whatsapp than think of SMS service

  2. Precisely….
    I hardly send or receive SMS.. Most of my contacts are on whatsapp,for voice I use skype or yahoo voice for international calls in place of making voice calls via my network provider.
    I cant even remember the last time I sent MMS… Data is the future indeed.

  3. I actually still send and receive thousands of SMS monthly, core part of my business, what has really gone down for me is my voice calls.

  4. While I accept that this constitutes a revenue loss to operators, I wouldn’t be quick to say that it is a significant one. I want to imagine that operators have long since ‘forsaken’ SMS as a huge revenue earner what with the teeming offers of monthly and weekly free SMS packages available. The must by now have embraced the fact that the use packet data to enhance other VAS has taken over. Take MMS for example, which has taken a back-seat also due to the ‘rise’ in use of social networks and instant messaging systems…

  5. It does look like sms revenue will keep dwindling. The state of the economy (locally and internationally) gets the creative juices of consumers flowing. Why voice_Call if you can voIP_call (or even sms)? Further, why sms if you can Instant_Message. IM is more cost_effective.

    The Operators (here in Nigeria) may want to explore – more aggressively – the option of selling sms_bundles. Personally, if cost is no object, I would prefer to use sms (in certain situaions) more actively. If I can have unlimited number of sms for- CHEAP, I would embrace that.

    With better internaet_conncetivity, voIP_calls may eventually totally replace voice_calls, while IM may snuff the life out of PAID conventional SMS!

    I often e_mail, use Twitter/FaceBook or IM where I ordinarily would call / sms.

  6. I still use the sms service…take for instance those who are not hooked up on this social network ish… I still maintain th
    at sms is still relevant…but not as it used to be with this young generation…

  7. I agree with the fact that SMS is gradually fading away and making room for these social apps earlier highlighted. Did MMS ever gain grounds in Nigeria? My answer is NO! Why the hell will I send a file and be charged about N50 or more. Just never made sense to me so I never used it.

    I still sometimes use SMS when I have to communicate with my older folks (eg mum) who don’t use phones that handle these apps like facebook, whatsapp, BBM. But then, bulks sms is taking care of that for me more appropriately. It just makes business sense sending an sms using my bulk sms platform at about N1.50.

    In all, I thinit it’s just a matter of time before the sms dies off.

  8. The observations of the article are largely true but one other fact that will play down on the effects of this trend is that a good number of people now using all these other alternatives and web-based services are also on permanent data subscription, another source of steady income for the operators.

    Here in Nigeria, that would translate to a minimum of ?1000 per month, approximately for each subscriber. In the era when SMS and voice call were the norm, majority of people hardly makes voice call from their phones and spends by far less than ?1000 on SMS each month.

    I still use SMS services, though very sparingly because there are a lot of people still using dumb phones and some that have feature phones and smartphones that simply don’t care about the extra features, in terms of putting them to use.

  9. The observations of the article are largely true but one other fact that will play down on the effects of this trend is that a good number of people now using all these other alternatives and web-based services are also on permanent data subscription, another source of steady income for the operators.

    Here in Nigeria, that would translate to a minimum of ?1000 per month, approximately for each subscriber. In the era when SMS and voice call were the norm, majority of people hardly makes voice call from their phones and spends by far less than ?1000 on SMS each month.

    I still use SMS services, though very sparingly because there are a lot of people still using dumb phones and some that have feature phones and smartphones that simply don’t care about the extra features, in terms of putting them to use.

  10. I think instant messaging has kinda replaced sms for me, I used to be an sms addict until the end of 2010 sending close to 300 a month right now it’s less than 20 sms a month. Calls not so much it’s practically remained the same as before.

  11. Personally speaking, SMS to me is pretty redundant. The people I communicate most with are spread all over the globe, so the cost of sending an SMS with it’s limited number of characters isn’t inspiring.

    I’ve had SMS bundles before, but to be honest, I would have preferred to have more voice calls – I don’t think I’ve ever sent 300 texts in a month. Even when I have sent more than 200 texts, 90% of them are to one person. Having a conversation on SMS like you would verbally is the only way I’d use that many SMSes. Most of my conversations nowadays are via IM; Whatsapp has become my most used IM recent months, followed by Kik.

  12. I read a similar article by Tomi Ahonen on the same subject and can’t but agree. Personally, I rarely send sms except for the bulk type and that’s when I have info to pass across to large group of people. Everyone else that is of strategic importance to me is on my bbm and I also use nimbuzz that aggregates other I’m services like yahoo etc so sms is out of the question. Either I send an Im or place a voice call depending on how quick I want a response.

    That is not to undermine the position of sms in the scheme of things.

    Its the only common feature from the dumbest phone to the smartest one.

    Surely, there’s some potential in there.

  13. With the adoption of smartphones and cheap cost of data from mobile telephony providers, I guess we call all agree that sms has taken the back seat. However, they remain revelant in conveying information esp during times when packet data connection is unavailable. Wow, we’ve come a long way since 1999 when owning a cellphone was considered a luxury.

  14. So true. If I want to send a message, whatsapp comes to my mind first. Can’t really remember the last time I sent a sms despite having bonus sms every now and then. Guess it is the old folks who still use sms.

  15. with the level of dump phone users sms can’t be easily erase,
    make free call nimbuzz- nimbuzz. But how many of my friends uses nimbuzz? If 90% of my contact uses smartphone and are active in nimbuzz, whatapp, etc i shall only budget data,..
    For my sms i use text 3.5 from greenspek.com send sms at 3naira 2 any network,..just an app,.. No need of opening web browser,login in etc,.
    The problem with sms is that some net-providers stil charge 10-15 when u send 2 other net-walk/work. While sms suppose to be ¥5 2 any network,.

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