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Published on February 28th, 2007 | by Babar Bhatti


SMS Use Surges in Asia

As reported at ZD Net Asia, the outlook for text messaging in the Asia-Pacific region remains bright, according to a new study from Portio Research.

Despite challenges from other mobile messaging services–such as mobile e-mail and mobile instant messaging (mobile IM)–short messaging service (SMS) will remain the dominant force in the Asian region, the study outlined. This is in line with the situation in Pakistan where text messaging and its voice variants (such as bolo sms from mobilink or recently introduced zoom talky from Warid) are getting more and more popular. With voice sms there is no need to type and the receiver can retrieve the message at his or her convenience. Till full multimedia messaging (video / pictures)  becomes affordable, popularity of text messaging will continue .

Portio analyst White estimated 1.4 billion additional mobile phone users in Asia by 2012, and SMS revenue in the region will mushroom from US$16 billion in 2006, up to US$22.7 billion in 2012.

White added that regional SMS traffic within the same period will explode, fuelled by a flood of new subscribers and handset purchases in the Asia-Pacific. The number of SMS messages will spike sharply from 967.7 billion in 2006 to a staggering 2071 billion messages by 2012, he predicted.

In contrast, Portio’s outlook is different for the North American market. Mobile instant messaging (MIM) is forecast to supplant SMS as the mainstream messaging service within the next four years due to the proliferation of smartphones and wireless Internet, its study showed.

One problem in the US is the spam text messages. Recently a US company sent nearly 100,000 unsolicited text messages to Verizon Wireless customers offering them a prize vacation. Verizon Wireless sued the company which sent the spam and won the case. This is good news – spam in e-mail boxes is already a major headache for most of us.

White said that although there will still be more SMS users than mobile IM users, “our study forecasts the number of IM messages to grow more than SMS messages in the United States sometime after 2011”.

In Asia, doubt remains over IM’s ability to ever topple SMS as the mainstream messaging service. “SMS will remain the dominant peer-to-peer messaging service in Asia-Pacific, as IM will require the user to have ‘always-on’ services like GPRS or 3G,” said Alex Chau, senior research manager at analyst house IDC, in an e-mail.

Chau noted that in developing countries like India, China and Thailand, users are still using just the basic services, such as voice and SMS.

Portio’s White agreed with this assessment. “We do not see this trend in Asia…mobile IM will be popular in Asia, but not as popular across the whole region as SMS,” he said.

The Portio analyst added that, while mobile e-mail–another messaging competitor–will become popular, it is unlikely to pose a major threat to SMS revenues within the next few years.

“Mobile e-mail will continue to grow very healthily in the enterprise sector,” White observed. “But outside Japan, mobile e-mail will have little impact on mass consumer markets, only with the elite, high-end smartphone users.”

I’ll close with some research on this topic. In a recent paper from Norway titled “Text and Voice: Complements, Substitutes or Both?”, the authors show that when incoming messages and calls stimulate outgoing communications, services that are perceived as substitutes, such as mobile text and voice, may evolve into complements in terms of the price effect when the network size becomes large. The paper estimates the demand for text messaging in the Norwegian market and find that the cross-price effect of voice depends on the network size. Voice is a substitute for text messages for small network sizes, and a complement for large network sizes.

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3 Responses to SMS Use Surges in Asia

  1. Pingback: State of Telecom Industry in Pakistan » Building Bridges: Voice, Web And Text

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