Ovum: Operator SMS revenues fall $13.9B due to social messaging

Consumer adoption of IP-based mobile social messaging services cost operators $13.9 billion in lost SMS revenues in 2011, increasing from 2010 losses of $8.7 billion, according to a new report from independent technology analyst Ovum.

Look for the declines to continue as the popularity of messaging apps continue to grow, Ovum warns, urging operators to rework the legacy services if they hope to remain relevant in the messaging market. Ovum recommends that carriers should partner with mobile app developers, sharing end-user data with them and allowing integration with subscribers' social connections--operators also should collaborate with handset manufacturers to secure app preloading agreements.

Mobile operators should look at the rise of social messaging as an opportunity, Ovum states. "This threat will drive telcos to consider alternative sources of revenue, such as mobile broadband. And now the market has been tested, operators know what types of messaging services work," Ovum consumer analyst Neha Dharia said in a statement. "In addition, operators are in a position of strength because they control the entire messaging structure through their access to the user's phone number and usage data. The established billing relationship is a great advantage, as is the fact that operators control to a great extent the services to which the user is exposed."

Notable SMS challengers include Facebook Messenger, a free standalone messaging solution enabling iOS, Android and BlackBerry device users to correspond directly with their friends, as well as Vonage Mobile and Skype. Last year, Apple (NASDAQ:AAPL) introduced iMessage, which enables consumers to send free text messages, photos and videos among all iOS devices; last week, the company expanded iMessage to its Mac desktop platform, adding that consumers have already registered more than 100 million iMessage accounts, sending 26 billion messages since the iPhone 4 launched in October 2011.

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