Technology | Media | Telecommunications

Monday, August 25, 2008

Text Messaging Laid Foundation for Growth

"Text me" has become a part of the everyday vernacular. In fact, total spending on mobile messaging services will rise 15 percent from $65 billion in 2007 to over $88 billion by 2012, according to a consumer market study by Strategy Analytics.

Although SMS will continue to contribute to the vast share of mobile phone messaging spend, the availability of low-cost flat-rate data plans will enable rapid growth in usage of traditional PC based messaging services, such as email and instant messaging via mobile.

By 2012 mobile email will account for 20 percent of total end user mobile messaging spending.

Senior Analyst Nitesh Patel noted, "Mobile messaging, which includes SMS, MMS, mobile email and instant messaging, will account for over 40 percent of the total consumer spend on mobile media and messaging services in 2012. We anticipate growing adoption of consumer email access via mobile, as flat-rate pricing, combined with improving email provisioning and device user experience lower the existing barriers to adoption and usage of this popular PC messaging format."

SMS use has exploded over the last 3 years in the U.S., while Western European SMS revenues are beginning to plateau due to price erosion, despite continuing increases in overall traffic.

In North America, Strategy Analytics expects healthy growth over the next five years with the region contributing to 25 percent of total end-user spend on mobile messaging by 2012.

However, the U.S. has long been the laggard of mobile messaging within the developed countries of the world -- and even some of the under-developed countries have exceeded the U.S. adoption until recently.

According to the CTIA's estimates, the U.S. market was responsible for generating less than 1 percent of the global SMS text message traffic in 2003. Clearly, the market adoption has come a long way since that time.