SMS usage declining

Category: SMS | 1 Comment | Posted on October 12, 2007

Joji Thomas Philip writes in ET that data compiled by TRAI reveal that SMS use has steadily fallen from September 2006.

• GSM operators have witnessed close to 9% drop in the outgoing SMSs during the Apr-Jun ’07 quarter.
• An average GSM user now sends about 35 SMSs per month as compared to 39 during the previous quarter.
• GSM operators’ total revenue from SMS has now fallen below the 5% mark.
• During the Jan-Mar ’07 quarter, GSM operators saw a 19% decline in outgoing text messages.
• Outgoing SMS per subscriber (for GSM) declined by 18.75% from 48 in Dec ’06 to 39 in Mar ’07.
• CDMA customers sent 20 sms during the quarter-ended June against 24 SMSs during the Jan-Mar ’07 quarter.

Reasons attributed to the decline in usage and revenue are:

Upward revision in SMS tariffs by several GSM service providers. And rationalization of tariff plans, where many operators discontinued non-profitable SMS packages.

During the quarter, there have been tariff reports indicating reduction in the number of free and discounted SMS under various packs and plans, increase in the rate for SMS, restriction on the usage of free/discounted SMS on festival/customary days.

Steady increase in the minutes of usage. The average SMS usage is bound to fall as operators went rural because customers in non-urban areas are comparably less text savvy.

For GSM players, the average increase in outgoing minutes of usage (MOU) was 2.2% during the last quarter.

This may be good news for the VAS industry. Despite the dip in SMS usage, the overall VAS revenues is increasing every quarter.

SMS is no longer the single driving force behind VAS revenues

Comments

One Response to “SMS usage declining”

1. Vijay Shukla
   October 31st, 2007 @ 2:10 pm

   It is an insightful article. However, sometimes partial use numbers can lead to incorrect forecasts.
   Mr. Joji Thomas, TRAI and others need to reckon that A2P messaging will be responsible for shift in total messaging traffic. Traditionally, the messaging traffic estimates and forecasts are driven by P2P traffic. Earlier this was okay when A2P traffic was relatively insignificant. Now with A2P traffic growing, the estimates and analysis must include A2P traffic.

   Best regards, Vijay Shukla

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