Indian telecom operators may lose $3.1 billion SMS revenue by 2016

A recent research pointed out that instant messaging apps used by people for communication have already surpassed SMS text messages. Another report now talks about the effect this may have on the revenue generated by telecom operators through SMSes. The research firm Ovum points out that Indian telecom operators may lose $3.1 billion in SMS revenues by 2016 due to the popularity of cross platform apps such as WhatsApp, Facebook Chat, Nimbuzz and Wechat.

According to Business Line, an analyst disclosed that SMS is slowly declining as a significant revenue opportunity while mobile Internet (broadband or narrowband) is steadily growing to become a key revenue generator. Network operators will have to face the challenge by converting the dwindling SMS revenue into a broadband revenue opportunity.

Will IM apps replace SMS? (Image credit: Getty Images)

IM messaging apps such as WhatsApp witnessed immense popularity last year and are growing to become primary tools for text/media transfers and group chats. The damage has already begun and the Indian telecom industry has lost around $781 million in SMS revenues last year as mobile telephony subscribers opted for other socially-inclined messaging apps for quick communication. Though these messaging apps require Internet connection, they are considered more convenient, cheaper and interactive.

There isn’t any current data from TRAI about the drop in SMSes sent by subscribers, but industry experts believe there has been a fall in SMS revenues for both GSM and CDMA. According to earlier data from TRAI, the number of monthly SMS sent per GSM subscriber fell by 5.62 percent during July-August-September period compared to the same period a year ago.

Currently, smartphones and mobile Internet aren’t dominating the Indian mobile space. There are numerous people who still rely on the old-fashioned text messages to communicate. However, this could change depending upon the mobile-penetration in the country. Considering such a possibility in futute, Indian telcos have started collaborating with messaging services. For instance, Reliance has teamed up with WhatsApp and Facebook while Aircel has tied up with Nimbuzz.