John White on Mobile Messaging

I'm happy to welcome John White from Portio Research Ltd to review the market of mobile messaging here.

John White is Business Development Director for Portio Research and has over 17 years experience in the technical publishing industry. Working in the IT sector previously and in the telecoms industry for the last 9 or 10 years, John has extensive experience in the mobile sector.

Hi John. Thank you for visiting Xellular Identity :) How are you?
Hi Xen, thanks a lot, I’m doing great thanks :)

How big is the market for mobile messaging? What are the forecasts for the mobile messaging market?
Mobile messaging is massive, the total mobile messaging market today is worth approximately $80 Bn USD and in 2007 we will see well over 2.2 trillion messages sent back and forth worldwide between mobile devices. SMS is by far the biggest player in this space, with worldwide SMS traffic volumes exceeding 1,662 billion messages in full-year 2006, generating revenues in excess of $47 Bn USD.

As if these figures are not impressive enough, we see SMS growing for some years to reach staggering worldwide traffic volumes of more than 3.7 trillion in 2012, generating a whopping $67 Bn USD in total revenues.

What are the key country markets?
The Philippines have long been regarded as the “SMS capital of the world” and this still holds true, in fact more than ever as recent changes to SMS pricing on the islands has seen traffic roaring through the roof. Elsewhere in Asia Singapore, Malaysia, Australia and China are all hot SMS markets, and of course China takes the crown as the worlds biggest SMS market due to the sheer size of the market overall. The USA is a very hot SMS market and still growing, and in Europe Denmark, the UK and Spain are all aggressive SMS markets. In Latin America, Venezuela enjoys very high usage levels and Mexico and Argentina are strong markets too.

Who are the leading operators in this market?
In the Philippines – all of them! Elsewhere, Maxis in Malaysia stand out, Telecom Personal in Argentina, O2 in Ireland and the UK and Netcom in Norway all enjoy way-above-average traffic volumes when measures on a per-subscriber-per-month basis.

How do you explain the dominant position of SMS as the worlds leading messaging technology?
It’s simple, it’s all about utility, price and simplicity. We have been saying this and printing this in our reports for some time now – SMS is useful, it serves a purpose, it can communicate a simple message from A to B quickly and efficiently at times when a voice call is not so convenient. SMS is easy, cheap, quick and many people think sending an SMS is fun. It is discreet, private, effortless and only takes a few seconds. There is no “downside” to SMS, it serves a purpose, it does the job well and it is quick, cheap and easy – what’s not to like?

How significant contributor to the overall revenue is the mobile messaging expected to be in the future?
We have not specifically forecast ‘messaging-as-a-percentage-of-ARPU’ going forward so I can’t give you exact numbers, but I firmly believe messaging will continue to be the biggest contributor to non-voice service revenues for some years to come. Currently, worldwide, voice accounts for approximately 80% of total mobile service revenues across the globe and messaging accounts for approximately 80% of all non-voice service revenues contributing to that total. AS other services grow then messaging’s dominant position will decline, but we only imagine that happening at a rate of 1 or 2 percentage points per year for the next few years, then perhaps faster once 3G becomes ubiquitous in the mass market.

What promises to sell in the future?
Mobile email, in the long term, but that’s still a good few years away for consumer mass markets.

John White will be here next Sunday for more talkin' about mobile messaging. Thank you John and see you next week! :)