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TMCNet:  Is the SMS dead? [Financial Express (India)]

[January 21, 2013]

Is the SMS dead? [Financial Express (India)]

(Financial Express (India) Via Acquire Media NewsEdge) There are few things that exemplify the short shelf-life of technologies better than the perceived death of the short message service (SMS) in the face of more versatile and cheaper alternative messaging services. The question, however, is whether the SMS is really dying or is simply seeing a gradual decline in marketshare in an ever-increasing messaging market. There is little doubt that apps like BlackBerry messenger, WhatsApp and Nimbuzz have made alternative messaging much more attractive than SMS, but it seems the comfort factor with SMS and the fact that it is pre-loaded on all mobile phones is a very strong advantage.

According to the telecom regulator Trai, the mobile subscriber base in India has crossed 900 million. Over the past decade SMS as a communication tool has dominated the Indian telecom landscape in mobile marketing. But questions have been raised over the future of SMS due to the recent developments on the instant messaging front.

First, a look at the alternatives. Apps like WhatsApp offer free messaging to other phones with the app loaded-the only cost the user has to bear is what he has to pay his service provider for data usage. In India, with telecom companies falling over themselves to woo customers, 3G prices have plummeted, thus making these data-bases messaging services all the more attractive.

According to technology research firm Ovum, SMSs, which contributed around 57% of non-voice revenues for telecom companies around the world in 2009, are projected to contribute only 47% this year. It estimates alternative messaging services slashed $8.7 billion from telecom operators' revenues in 2010 and $13.9 billion in 2011. And it's not the only one saying so.

Portio Research, an independent research company, says that 7,844 billion SMSs were sent in 2011 globally, compared to 3,492 billion messages through alternate services. Due to the proliferation of smartphones, these number are projected to become 9,554 billion and a whopping 20,293 billion, respectively, by 2016.

WhatsApp itself said that it saw 10 billion messages being sent and received every day in 2012, while Nimbuzz claims more than 105 million users across the world. In India, they are one of the dominating player with close to 20 million users. Further, where one disadvantage of these apps is that they are restricted to users who have the app downloaded, even this shortcoming is being addressed.

Hotmail co-founder Sabeer Bhatia's new venture, called JaxtrSMS, allows users to send messages to anybody around the world. Only the sender needs to have JaxtrSMS installed, the message will reach the receiver regardless of whether they have the app or not. This is the future of these alternative messaging services. And then, of course, there is Research in Motion's BlackBerry Messenger, which is an established name in the free-messaging market-it's a major reason why Blackberry phones have become so popular among non-business users. Apple, too, has introduced iMessage-making messaging free between iPhones.

According to Vikas Saxena, CEO, Nimbuzz, alternative messaging services are the real messaging. "SMS has seen its day," he said, adding that the growing ubiquity of smartphones, the advent of cheap data services and the growing number of apps being downloaded are all contributing to the SMS becoming obsolete.

Further, he says that the advantage of alternative messaging services doesn't necessarily lie in how cheap they are compared to SMSs. "It's not about rates," Saxena said, "SMS will have its users, but it will not be able to provide services like group messaging, emoticons, etc." Saxena added that we are living through an epoch changing time for consumer internet and messaging- like when Hotmail made email browser centric from being computer centric, when Google Search changed the way we access the internet and Facebook overhauled our online interactions.

But that said, it must be noted that though SMS revenue is down, it still remains a major mode of communication for many people. According to Netcore Solutions CEO Girish Nair, every technology has an adoption cycle. "The comfort level that most people have with SMS is very strong. Businesses trust it and have started conducting some of their communications on SMS," he said.

According to the Netcore CEO, SMS is still the most prevalent use of communication in India among the educated masses and is still very popular in emerging geographies. Instant messaging platforms may be popular in Western countries and are also catching on in India, but it will take time to evolve into a mass medium of communication.

In addition, Nair added that the fact that SMS is loaded on every phone is a major advantage. "Not everybody downloads messaging apps and knows how to use them, but everybody trusts SMS." Also, anybody living in India cannot deny that advertisers have found the SMS a very attractive mode of advertising-so much so that the government had to even restrict the use of bulk messages.

But it takes just one significant partnership-for example, if WhatsApp partners with Samsung to have the app pre-loaded on all Samsung phones-to hugely boost the reach of alternative messaging services. Alternatively, phone makers like Samsung or Nokia may soon find it is worth their while to create their own alternate messaging apps, thus attracting revenue from advertisers as well. So, while it cannot yet be said that alternative messaging services are killing the SMS, it can certainly be said that SMS is slowly but surely heading towards becoming obsolete.

Copyright 2013 The Indian Express Online Media Pvt. Ltd., distributed by Contify.com Credit: Sharad Raghavan (c) 2013 The Indian Express Online Media Pvt. Ltd., distributed by Contify.com

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