Telecoms to lose US$54bn to smartphone messaging apps

New research has indicated that mobile telecom companies will lose close to US$54 billion by 2016 thanks to the insurgence of messaging apps, with African operators already feeling the pinch.

Research firm Ovum has predicted that the industry will lose US$23 billion this year alone.

This is a process that is already underway in Africa, where there have been reports pointing to the fact that telecom companies are already losing revenue to free messaging apps such as WhatsApp.

WhatsApp, used worldwide, has been blamed by telecoms for their dwindling revenues through text messaging, most notably publicly blamed for the loss of revenue for the Dutch telecom KPN.

In the report, Ovum says the rapidly increasing number of OTT players demonstrates that social messaging is not a short-term trend but actually represents a shift in communication patterns.

Neha Dharia, consumer telecoms analyst at Ovum said: “Social messaging is becoming more pervasive, and operators are coming under increased pressure to drive revenues from the messaging component of their communications businesses.”

“Operators need to understand the impact of social messaging apps on consumer behaviour, both in terms of changing communication patterns and the impact on SMS revenues, and offer services to suit.”

This pressure from these social apps has forced telecom companies to review their SMS bundles and find a model that keeps them profitable. This is in addition to the competition they face within the industry already.

But all is not gloomy. According to Ovum, by 2014 Rich Communication Suite (RCS) platform will be available in the mass market. The platform will provide consumers with features such as file sharing, video calls and IP-based messaging.

Up until then the companies will have to find ways to stay above the water and survive the onslaught.

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