Opinion: SMS services’ rivalry with WAP applications

A number of games nowadays, aside from gambling, demand the taste of money. Web and mobile apps, which were popular about 10 years ago, have now been eclipsed by SMS that rakes in 28 times the revenue in mobile commerce.

Mobile Value Added Services (M-VAS) for the mobile market worldwide are a gold mine which everybody wants a piece of.
A billion dollar industry, SMS commerce is largely conducted via mobile text messages. By the last quarter of 2012, the worldwide mobile messaging industry that is largely dominated by mobile entertainment value added services (Music, images, videos, news and mobile TV content delivery) had annualrevenue of USD 210 billion.
Kenya per se had the mobile entertainment market record the highest revenue with $46 million in 2008 as compared to banking, insurance and agriculture. The number is expected to rise to $165 million by 2013. However, to realize the potential of mobile commerce, as Researcher JBB pinpoints, Kenya needs to go beyond traditional mobile entertainment content/services like ringtones, graphics/wallpapers, and mobile games.
“Providing a better variety of content, especially local content, will be critical for higher adoption of mobile entertainment content/services” notes Julien Blin, Principal Analyst and CEO of JBB Research.
It is due to peer-to-peer texting that SMS gaming has become a more familiar communication style. It is estimated that 99 percent of handsets have support for SMS, 15 percent for MMS and WAP with only 10 percent support for mobile apps.

MMS, WAP and apps are only available in GPRS, Edge and 3G coverage areas. UK-based research group Portio projects that revenues from mobile messaging will rise to 300 billion by 2014
WAP-based Web and Native app revenues

A report released by Canalys, a global market research company, in June last year said that direct revenue from the sale of apps stood at 7.3 billion in 2011. As Internet speeds continue to improve, more people are expected to purchase advanced devices that will bring an estimated revenue rise to $36.7 billion by 2015.
With the Informa Telecoms and Media estimating the Mobile VAS (M-VAS) market in Africa to be worth over US$5.5 billion in 2010, messaging including P2P was said to account for 80.5 percent of the figure. Mobile Internet, which is the main avenue for web and native apps, only contributed 14 percent of the revenues.
Despite differences in the two mobile technologies, major revenue growth has been estimated over the next 5 years. And due to improved broadband and availability of cheap internet-enabled phones, the annual growth is projected at 22 percent.
What is the low-down? The industry has not been making huge revenues as a coincidence. The amount money that changes hands between the players is not little leading to revenue leakage. The high service costs end up being transferred to the expense of the consumers most of whom are low-income earners.
The limitation of characters and richness of content on SMS, low penetration of 3G handsets and service, illiteracy, lack of content and poor mobile platforms are some of the other hurdles facing players in the mobile commerce market as a whole.
However, African content developers and mobile operators are using mobile VAS in a positive way to influence the digitization of the continent by directing tech solutions to industries such as healthcare and agriculture.

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