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Short messaging services versus instant messaging

Value versus volume

It might be supposed that the growth in MIM is coming at the expense of SMS and mobile carriers. However despite the burgeoning volumes of messages carried over MIM services, we expect SMS to generate more than $100 billion in 2014, equivalent to approximately 50 times the total revenues from all MIM services. So MIM services may win the battle for volume in 2014, but SMS will be victorious in revenue terms.

Executive summary

Text messaging’s heyday is approaching but in 2014 it should still generate significant margin for the mobile industry, and its importance should not be underestimated. There are several ways for operators to respond to the negative long-term outlook for SMS.

  • Try to create an operator-owned messaging service to rival existing providers.
  • Incorporate MIM-type features into SMS, such as group distribution lists and audio/video clips.
  • Encourage adoption of MIM services to drive take-up and usage of mobile data.
  • Promote SMS as a vehicle for application-to-person messages (A2P).

Standalone MIM service providers aiming to maximize revenues may need to diversify their revenue streams — perhaps by becoming content providers.

Short messaging services versus instant messaging: value versus volume
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