Global SMS traffic to reach 8.7 trillion by 2015: Study
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Research by Informa Telecoms and Media finds that global SMS traffic is expected to increase to 8.7 trillion messages in 2015 from 5 trillion messages in 2010, signaling a big opportunity for retailers and marketers alike.
SMS revenues are expected to reach $136.9 billion in 2015 from $105.5 billion in 2010.
SMS is increasingly being used by banks and financial institutions, brands, retailers and transport providers to deliver alerts, information services, mobile marketing campaigns, appointment reminders, tickets, coupons, banking and payments, and loyalty programs.
Mobile Commerce Daily interviewed Pamela Clark-Dickson, senior analyst at Informa, Inverness, Scotland. Here is what she said.
What is the key finding of the study?
The Mobile Messaging report covers a number of areas, including SMS. I would say that the key finding is simply that SMS traffic and revenues continue to grow on a global basis.
This growth is despite the fact that, in both developed and increasingly in emerging markets, mobile users have access to an increasing number of messaging and communications options on their devices, whether that is email, instant messaging or mobile social networking.
The United States, for example, is the largest single market globally in terms of SMS traffic, ahead of China, according to our forecasts.
In 2010 SMS traffic in the U.S. was expected to total 1.1 trillion messages, ahead of China with 995.3 billion messages.
And this is occurring in a market where smartphone penetration – which could be said to have the propensity to increase the use of data-intensive messaging applications like email, IM and mobile social networks – stood at 51.46 percent in 2010.
We are also seeing the emergence in the U.S. of smartphone applications which enable increased use of messaging, via group messaging and communities, such as Gogii’s TextPlus, which is available for the iPhone and Android devices.
The other important point to make, I think, is that while person-to-person SMS will continue to dominate SMS traffic and revenues for the foreseeable future, application-to-person SMS traffic and revenues is on the rise, due to the increasing use of SMS by the enterprise and government sectors, and I would count social networks also as enterprise customers.
And the reason why the enterprise and government sectors are using SMS to communicate with their customers, employees and the general public, is because they know that if they use SMS, they are going to reach everyone who owns a mobile phone, from low-end basic handsets through to the latest Apple iPhone or Android device. SMS is cheap, it is reliable, it is universal, and it has unrivalled utility as a bearer for communications, information and services.
What is the most surprising finding?
For those not familiar with the SMS market, I guess what might surprise people is the fact that there remain burgeoning use cases for SMS, in both developed and emerging markets.
In developed markets, I guess you could say that the continued, and increased, use of SMS is surprising because of the rising penetration of smartphones. I suppose people think that because we hear a lot about Apple’s iPhone, devices based on Android, applications, and social networking, that SMS is becoming irrelevant. It’s turning out that this is most definitely not the case.
And it’s for the reasons that I mentioned before – not only do the majority of mobile subscribers still find SMS to be the most direct, easy to use and cheap communications bearer on their devices, but enterprises are realizing this too, including social networks.
Enterprises are realizing – again I’m repeating myself here – that SMS has the highest penetration of any communications channel on mobile, and what’s more, using SMS to communicate with customers, employees and the general public is probably a lot cheaper and more likely to get mass-market reach, than using the mobile Internet or an application.
In the U.S., again, as I mentioned earlier, we are seeing an interesting tie-in between applications and messaging, where people are downloading applications that help them to use more text and picture messaging.
In emerging markets, SMS is literally changing people’s lives for the better. In developed markets we are very much spoiled when it comes to access to information, services and content – we have multiple channels/screens by which we can consume information, services and content.
In emerging markets, most people are far more able to afford a mobile phone than they can a PC and a broadband Internet connection, and even Internet cafes are not a hugely viable option.
The mobile phone is turning out to be the means by which mobile subscribers in these markets are improving their economic and social well-being, because they are able to access information that they can use to produce food, or to prevent or treat disease, among others.
They can also access financial services, such as mobile money transfer, micro-finance and payments.
What are the most important factors driving the growth of SMS?
SMS continues to be a relatively cheap form of communications, with transparent pricing.
In many countries, and in the U.S., wireless carriers offer huge bundles of messages, or unlimited messaging, on their tariffs – when people aren’t concerned about how much something costs there is a propensity to use it more, and that is the case with SMS.
I can not stress how important SMS’ universal access is. SMS is literally on every mobile device that is sold in the market today, in every country in the world. Interconnection between wireless carriers means that mobile users can pretty much be guaranteed that any country they go to, they will be able to send and receive SMS to and from their home network, or to and from the networks of the country that they are in.
What advice can you give to brands, marketers, retailers and merchants based on these findings?
The most important advice that I would give to brands, marketers, retailers and merchants is don’t discount the use of SMS in your marketing campaigns and your communications with the mass market, customers and your employees.
Sure, the iPhone and similar devices are much more compelling and applications are a lot more fun and attention-grabbing, but if you want something that is reliable, relatively inexpensive to develop with and that has the widest possible reach, and that will therefore deliver you a good return on your investment or help you to reduce your costs and improve your customer service, then I would say to keep using SMS and keep innovating with SMS.
Giselle Tsirulnik is senior editor at Mobile Commerce Daily and Mobile Marketer. Reach her at email@example.com.