SMS the hidden gem: Ofcom Market Communications Report

Last week’s Ofcom Market Communications Report once again highlighted the exponential growth of mobile data services. Yet perhaps a more intriguing (and overlooked) statistic to emerge from the report was the sustained growth of SMS. Despite the increasing popularity of mobile social networking, the reliable and traditional SMS has once again proved why it remains one of operators’ strongest data revenue streams, with more than 100 billion text messages sent in the UK during 2009 – equivalent to 1700 texts per person, up from the 1200 texts per person sent in 2008. I would attribute much of the consistent growth of SMS to its ever-widening adoption beyond peer-to-peer messaging, such as social networking, enterprise applications, advertising and machine-to-machine communication.

The enduring success of SMS among users is intimately connected to its ease of use, low cost and reach. With its growing ubiquity as a means of updating, informing and alerting in business communication processes, enterprises are also increasingly using mobile messaging for delivering consistently higher levels of service to their customers. For the mobile services providers and their customers, this will mean a far wider range of services that are faster, more relevant, more effective and more flexible than ever before. From text reminders to personalised content, enterprise applications to consumer-facing offerings, these services will not only enrich the end-user experience but open up significant new revenue channels. For instance, Juniper Research recently revealed that global mobile banking services will be generating 90 billion text messages per annum by 2015, as banks seek to utilise SMS as a means of enhancing customer communications and services.
 
However, it is also important that operators innovate in order to capture this opportunity for new revenue streams from SMS. The pace of development and change within the mobile landscape puts operators at risk of becoming ‘bitpipe’ providers. In order for them to maintain competitive advantage as mobile service enablers, they must seek to enrich the services they offer by leveraging the network and subscriber intelligence at their disposal. Using intelligence around location, identity, presence status and profile, they can deliver more targeted and relevant offerings to subscribers. This new generation of mobile service providers will be uniquely equipped to deliver compelling and personalised offerings to both businesses and consumers, such as group messaging and signatures - supporting the operator in sustaining SMS revenue streams as the messaging market continues to evolve.

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