Carriers lost $13.9 billion in SMS revenue during 2011

By on

Research firm Ovum estimates that wireless providers lost nearly $14 billion in SMS revenue during 2011 due to social messaging. If past trends are any indication, that number is likely to increase moving forward as Ovum warns operators to rework their legacy services in order to remain relevant in the messaging market.

The $13.9 billion hit is up from an estimated $8.7 billion loss in 2010 largely in part to alternative chat methods. Many social networking sites like Facebook have launched messaging apps that allow friends to chat on-the-fly without utilizing SMS. Instant-messaging clients are now accessible on more mobile phones than before and OS-specific features like BlackBerry Messenger and iMessage aren’t exactly helping matters for carriers. 

Although it sounds like a substantial amount of revenue lost (and it is), the figures represent roughly 6 percent of total messaging revenue in 2010 and 9 percent in 2011. With the popularity of Apple’s iPhone and iPad and a full year of iMessage in the pipeline, wireless providers should expect to lose even more money this year.

Of course, carriers are well aware of the changing landscape and many have already taken action to ease the bleeding. In August 2011, an AT&T spokesperson confirmed that the company would no longer offer an introductory 1,000 message bundle. This move forced customers to either sign up for a $20 unlimited plan or accept pay-per-message rates of $0.20 per SMS or $0.30 per media message.

SMS images from Shutterstock.

Add New Comment

TechSpot Members
Login or sign up for free,
it takes about 30 seconds.
You may also...
Get complete access to the TechSpot community. Join thousands of technology enthusiasts that contribute and share knowledge in our forum. Get a private inbox, upload your own photo gallery and more.