The Punch has a business article titled “BBM on iPhones threatens telcos N9.75bn SMS revenue”. The heading was almost a put off from the word

Is BBM4All a real threat to telcos' N9.75bn SMS revenue?

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The Punch has a business article titled “BBM on iPhones threatens telcos N9.75bn SMS revenue”. The heading was almost a put off from the word go. There is no way in hell that BBM for iPhones will threaten anybody’s revenue here in Nigeria. The iPhone marketshare is so insignificant that chances of that happening is zero. But I did read the full article, in which the complete claim is that BBM on both iPhones and Android threaten the N9.75bn SMS reveneue due Nigerian telecoms operators. Sounds much better, but then I doubt that it is a serious claim.

For one, WhatsApp has been around much longer, has more subscribers, is more direct to setup and get going, and is available on more platforms than BBM. If any instant messaging app has a chance of disrupting SMS revenues in Nigeria, it has got to be WhatsApp. Let me itemise why WhatsApp has the better chance of being the disruptor:

  • WhatsApp has been around much longer
  • WhatsApp has more subscribers
  • WhatsApp is more direct to setup and get going
  • WhatsApp is available on more platforms – Android, Windows Phone, Blackberry, iOS, Asha/S40, J2ME

I do understand the BBM craze that is characteristic of Nigeria. No doubt, BBM is popular here. Very. I even personally prefer it to WhatsApp, but the Punch article just doesn’t reflect the realities on ground. Yes; BBM4All is a part of the overall threat, but WhatsApp is the stronger part of the equation. At least for now.

Telcos Need To Evolve

There is no doubt though that instant messaging as a whole will eat out of telecoms operators’ SMS revenue. It has been doing so for years and will continue to do so. It is time that operators begin to evolve. This is the data age (we need to stop referring to SMS as a data platform already). We need more robust data services. That is the future, and it is the operators that deliver on the internet front – to be more specific, the broadband front, who will ride in style. Instant messaging is here to stay.

  1. Dumb article from Punch. But again, what’s to expect from Nigerian half assed donkey journalism.

    If its not crap political news in the dailies daily, forget applying sense to the rest.

  2. Sure, Instant messages will continue to eat SMS revenue. Sending an SMS is what you do when your recipient is not on an IM. / not connected, and you need to communicate something urgent.

    Otherwise, you use an IM

    The existence of BBM on more platforms and the fact that Manufacturers like Samsung and Tecno ship their devices with BBM pre-installed can only sound a progressively ominous death knell on SMS revenue ..

    Can BBM solely, primarily, do that damage? It would be dependent on whether it is more used here, or not, than other IMs.

  3. Someone already said it. I think as more subscribers embrace smartphones and start using various data services associated with smartphones, operators’ revenue will actually increase rather than decrease. I cannot reckon spending up to N1000 a month on SMS in the days when Internet communications via phones was either not available or to expensive to make it practical but I spend more than N1000 every month for more than two years now and I still make some calls and send SMS sparingly too.

    My understanding is that the BBM4All will actually mean more money for operators than reduced income as more subscribers start adopting smartphones and leaving dumb phone behind.

  4. Nothing is threatened really. It’s just law of conservation of profit (energy) being observed.
    SMS profit will be convert to data profit as smart phones proliferate. People that usually make total spending of 1k on calls will now add another 1k to power their data enabled phones monthly.
    Telcos will continue to make a killing here for a long while

  5. I will not say it is disrupt in the literal senses but the various messaging apps has surely put a noticeable dent on the revenues of the telcos. In my own experience, prior years whenever I am in Nigeria, I would literally spent 500 to 1000 on calls daily but my last visit I do not eveb think I spent 2 thousand on recharge card on my entire trip. Mostlycommunicated via bbm, whatspp and occasioal calls with very very few actual sms. Go figure

  6. Other than banks and companies interested in notifying transactions through sms service or OTP, not many use sms these days. But i don’t see telcos loosing money once they invest in providing good data network. That is were customer demand is heading now. I don’t even make calls as much. Will I/M the contact first before placing a call through if don’t get any response

  7. Quam has painted the picture well. Subscribers spend far less monthly on data for instant messaging than they used to spend on SMS. This puts a dent in operators’ messaging revenue. The advent of instant messaging as a whole is not good news to the balance sheets of operators.

  8. Spending less on SMS and calls could be down to other reason than just the emergence and popularity of instant messaging services. There has been general drop in both call and SMS charges over the years and someone who is not very careful may just attribute reduced expense on these two services on the emergence and increased use of instant messaging services.

    The main thing to remember is that though there has been general drop in the use of SMS and calls, something else is taking their place and definitely generating money for the operators which wasn’t there before. There are many people who only buy data subscriptions just so they will keep pinging and don’t use the internet much. For such people, I doubt they were spending up to a thousand naira every month on SMS but they are spending that much because of instant messaging services.

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