Mobile messages to pass two trillion mark next year

The number of mobile messages will surpass two trillion in major markets next year, although operators will have to plan for tighter margins as services become commoditised, said analyst Gartner.

The number of mobile messages will surpass two trillion in major markets next year, although operators will have to plan for tighter margins as services become commoditised, said analyst Gartner.

Gartner says 2.3 trillion messages, including picture messages, will be sent across major markets worldwide in 2008, a 19.6% increase from the 2007 total of 1.9 trillion messages.

Mobile messaging revenue across major markets will grow 15.7% in 2008 to £30.1bn, up from £26m in 2007.

Although mobile messaging traffic volumes will continue to show strong growth in many markets, operator margins on messaging services have become progressively thinner as a result of competition and market saturation, Gartner said.

It said the compound annual growth rate (CAGR) for short message service (SMS) revenue in major markets worldwide from 2002 to 2006 was 29.8%. But from 2007 to 2011, the CAGR for SMS revenue is forecast to be 9.9%.

"In many markets, there has been strong pressure on operator margins for text messaging services, and this has often been driven by intense competition between carriers," said Nick Ingelbrecht, a Gartner analyst.

"At the same time, consumers have grown accustomed to large or unlimited bundles of inclusive SMS as part of their basic cellular service package. Carriers should plan for a future of much reduced margins on messaging services.

"They should develop messaging platforms, services portfolios and pricing plans that support the broader objectives of customer acquisition and retention, rather than short-term margin enhancements," said Ingelbrecht.

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