LONDON—Currently representing 10 percent of total carrier revenues, short message service (SMS) is the dominant data contributor to carrier average revenue per user (ARPU), and its value is expected to continue to grow, according to a recent Frost & Sullivan study.
Frost & Sullivan credits the youth market with driving mass-market uptake of SMS messaging, which is expected to jump from its current level of 186 billion messages sent across Western Europe per year to 365 billion sent per year in 2006. SMS is attractive because of its simplicity, accessibility and ease of use, according to Frost & Sullivan analysts. “Subscribers discovered it themselves, and are aware of its value. This is where SMS has an advantage over new technologies and services that require packet-based networks, new wireless devices, interoperability, sophisticated billing infrastructure and greater bandwidth to deliver a compelling and value-added user experience,” the study reads.
Currently, person-to-person (P2P) messaging is the most popular form of SMS, and accounts for 95 percent of text messaging traffic. However, “The advent of 2.5G and 3G networks and devices will usher in a new era for richer, more engaging multimedia technologies,” explained Allison Webb, research analyst for Frost & Sullivan. “SMS is fully deployed today and presents an instant opportunity for key wireless groups throughout the value chain to generate new revenue streams by delivering premium content services and applications to subscribers.”
Frost & Sullivan expects SMS to remain predominantly P2P and act as a stepping stone for next-generation technologies including MMS.
