Global technology analyst Ovum has released forecasts for SMS business between now and 2016 where mobile service operators will have lost US$54bil in SMS revenues due to the increasing popularity of social messaging services on smartphones like WhatsApp, Facebook and Twitter. It is one of the report I have been looking forward to this last quarter of 2012.According to the report which I have read,mobile network operators are expected to lose US$23bil this year. The report indicates that collaboration with handset manufacturers is imperative if the operators are to remain relevant and competitive in the SMS business. While reading the report,it was clear that social messaging is becoming more pervasive, and mobile network operators are coming under increased pressure to drive revenues from the messaging component of their communications businesses as has been the case over the last decade.Mobile operators in Europe and Asia-Pacific will be affected the most, and should be vigilant with respect to OTT messaging activity. The report also addresses how operators can counteract the social messaging threat from over-the-top players and highlights the rapid increase in the number of over-the –top players, and demonstrates that social messaging is not a short-term trend, but a shift in communication patterns.
Mobile network operators need to understand the impact of social messaging apps on consumer behavior, both in terms of changing communication patterns and the impact on SMS revenues, and offer services to suit.Last week,I came across a research that shows over-the-top players are changing consumers’ messaging preferences, and the pressure they are exerting on operators’ messaging services is forcing them to offer increased SMS bundles and to experiment with messaging pricing models, further dampening revenue growth.There is no doubt the importance of industry-wide collaboration cannot be underestimated as operators look to a Rich Communication Suite platform to provide consumers with features such as filesharing, video calls, and Internet Protocol-based messaging. RCS, is not however not expected to reach the mass market before the next two years, so for the time being I think mobile network operators will have to rely on innovative pricing strategies, partnerships, and launching operator-branded IP-messaging services to keep up with the changing demand.Network operators that want to take advantage of RCS in 2014, they will have to have a strong market presence which means they need to move to social messaging now in order to make sure over-the-top players are not in a better position to take advantage of future opportunities.
Ovum, an independent telecoms analyst firm predicts that smartphones shipped globally will hit 1.7 billion in 2017, with emerging markets seeing particularly strong growth and currently, the global population is now more than 7 billion people. Ovum report which I read last night, finds that 450 million smartphones were sold last year of which around 160 million were sold in emerging markets regions of Middle East, Africa, Latin America and Asia.China alone accounted for about 66% of smartphones sold in emerging markets, and Ovum estimates that smartphone shipments could reach nearly 57% of total devices sold in emerging markets by 2017. China is at the centre of smartphone development and adoption in emerging markets, with the whole ecosystem increasingly geared toward the production of ever-more feature-rich affordable devices.The report claims that a new wave of affordable smartphones will have a major impact on consumer choice in emerging markets.Smartphones have become cheaper, and a nascent entry-level segment is taking shape in the sub-US$100 price band. However, affordability remains a big issue in most emerging markets especially sub Saharan Africa.
While reading the report, I learned that operator subsidies for smartphones are not common in emerging markets and this has hampered smartphone adoption.Major chipset and platform vendors such as Mediatek and Qualcomm are having a significant impact on both smartphone availability and affordability by offering reference designs to their device OEM partners and reducing barriers to entry.While much of this development is occurring in China, local brands from other emerging markets are also adopting this model and are expected to show strong growth with India and Indonesia leading followed by Brazil and Russia. China is driving smartphone adoption and development among emerging markets, many Chinese adjacent players are aiming to leverage the opportunity that smartphones offer in terms of extending their online mobile services.Virtually all of these players are using Android, but some of them are going a step further and customizing Android to offer their own user interfaces, icons, and services, essentially replacing Google in the process.The report also shows how Vendos are launching new phones and innovating on the distribution side, with companies successfully focusing on online sales and services.
The growth of smartphones in emerging markets will see a corresponding growth in online services such as cloud, storage, and purchasing based on mobile money transactions and OEMs and equipment vendors will also increase their presence in online services.Mobile operators seeking to gain a slice of the growth in low-cost smartphones in emerging markets through white labeled devices will struggle to gain traction in the market and achieve the same success as the more established brands.