Can mobile operators win big with social messaging?
Advisory group, Delta Partners believes that mobile operators will leverage their network infrastructure in the future, something that will likely be reflected in consistently growing data tariffs.
According to an upcoming report by Ovum, social messaging is estimated to cost telecoms operators over $23 billion in mobile messaging revenue in 2012.
In earlier research, Ovum indicated that consumers’ increasing use of IP-based social messaging services on their smartphones cost telecom operators $8.7 billion in lost SMS revenues in 2010, and $13.9 billion in 2011.
However, Delta Partners, which specializes in telecoms, media and technology, said that the adoption of text-based Instant Messaging (IM) services is unstoppable and unavoidable, and called on mobile operators to think twice before looking for ways to get rid of them.
“The shift from voice to data-enabled Instant Messaging services has been traditionally justified by the fact that IM is for free. There is no doubt that this factor has been a major driver of adoption,” the group said.
It pointed to customer behaviour during a three-day BlackBerry outage in October last year which caused RIM’s BlackBerry Messenger (BBM) service to falter, but not voice communication.
Delta Partners found that BlackBerry users affected by the outage altered their communication pattern very materially during those three days, by increasing voice usage by 11%, and boosting their SMS usage by as much as 85%.
“Customers replaced their severed umbilical (read: BBM) connection with alternatives, even if these were charged, substituting a text-based service for another (SMS),” it said.
“Text-based messaging has become a staple and often non-replaceable form of communication, irrespective of the delivery method,” the management and advisory firm continued.
From a mobile operator’s perspective, the group said that the BlackBerry outage shows the relevance of IM and over the top (OTT) apps for their subscriber base, and the associated cannibalisation of traditional voice and SMS revenue.
“It further raises the importance of properly monetizing operators’ investments in newer technologies (e.g. LTE), capacity increases and additional spectrum acquisitions to keep up with the massive data requirements of the new mobile data environment,” Delta Partners said.
The group highlighted a customers’ dependency on mobile text-based messaging services, which can be further extrapolated to other forms of mobile communication. “Customers’ willingness to pay shows that they attach significant value to the service, much more so than the free ride they currently get with IM apps.”
Delta Partners believes that mobile operators – the true enablers of voice, data or whichever new forms of communication – will be the long-term winners of the hyper-connected world.
“After all, customers can easily replace BBM, Whatsapp or Facebook should they fail – replacing mobile operators is a completely different ballgame. The pipe is still the unavoidable piece of the equation, something that mobile operators will leverage in the future and which will most likely be reflected in consistently growing data tariffs,” it concluded.
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