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Indian telecom operators may lose $3.1 billion in SMS revenues by 2016 due to the emergence of social messaging apps such as WhatsApp, Facebook Chat, Nimbuzz and others, according to research firm Ovum.
“As SMS slowly declines as a significant revenue opportunity, mobile Internet (broadband or narrowband) is steadily growing as a key revenue generator. I think both incumbents and new operators will need to address the challenge in converting the dwindling SMS revenue into a broadband revenue opportunity,” Neha Dharia, consumer analyst at research firm Ovum, told Business Line in an email interaction.
In 2012, the Indian telecom industry lost close to $781 million in SMS revenues, as mobile telephony subscribers increasingly used social messaging apps for quick communication. In addition to being cheaper, these apps are more interactive as compared to the traditional SMS.
According to data from the Telecom Regulatory Authority of India (TRAI), the number of monthly SMS sent per GSM subscriber fell by 5.62 per cent to 36 for the three months ended September 2012 from 38 in the year ago timeframe. For CDMA users, this number was marginally up to 25 during the same period.
Though TRAI has not provided data for recent quarters, industry watchers believe that there is a secular fall in SMS revenues for both CDMA and GSM operators.
Indian telecom operators seem to be cognizant of this shift. They are increasingly co-bundling free messengers and content services to push data usage as an alternative to cascading SMS revenues.
Last year, Reliance Communications tied up with WhatsApp and Facebook, enabling its GSM customers to use the two services for Rs 16/month. Aircel, too, has taken the leap by tying up with Nimbuzz.
Vikas Saxena, Chief Executive Officer of Nimbuzz, said: “This is a disruption that we are seeing, but it does not necessarily mean that we are going against telcos. We are collaborating with telecom companies for monetising our products through operator billing”.
He expects telecom operators to themselves start offering Instant Messaging going forward, but cautions that they will have to come up with something unique and different from what is currently available. Handset maker Nokia recently launched a new phone, Asha210, which has a dedicated WhatsApp button.
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