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€3.6bn of Additional SMS Revenue is Overlooked By Global Mobile Operators Each Year

Anam Mobile revealed that global mobile operators are losing out on as much as €3.6billion (£2.4billion) of revenue per year through lost opportunities to create value-added SMS messages. Anam’s review considers how operators can increase the average value of each text message sent across their networks.

Text messaging has grown into a phenomenally popular form of communication, with research from the telecoms analyst company Informa Telecoms & Media revealing that over 600 billion messages were sent worldwide during the first quarter of this year – over 75 messages for every mobile subscriber. Yet many operators are focussing on other, less well-established, data applications as they aim to increase ARPU and profitability.

By introducing new data services through SMS, operators can tap into the existing level of comfort that consumers already feel when using the short, 160 character format. This approach will make it easier for new services to be adopted and can attach real value to the messages that individuals already send.

“After voice, text messaging is still the most popular application on mobiles,” said Dan Winterbottom, Senior Analyst, Mobile Content & Applications at Informa Telecoms & Media. “Yet when it comes to innovation and new services, text messaging is being ignored by many operators in favour of new data services. There is an innate understanding by subscribers of how texting works, this could be utilised by operators when they introduce new services.”

Currently, a large proportion of text messages are included as part of bundled deals provided by operators and therefore are, in effect, free to the customer. This means that each individual message has a low perceived value to the user and almost no financial value to the operator.

However, there are many applications that could potentially be introduced to consumers through SMS. If the subscriber is able to use SMS to interact with their device in a more efficient, more enjoyable or more productive way, then they will be willing to pay a small additional fee for those SMS messages. The subscriber will accept that these messages fall outside of the ‘free’ text bundles, or add on a new bundle to their service plan; SMS messages are one of the few services that the user will always know how to use on their mobile phone.

Gerry McKenna, CEO of Anam says, “I am constantly surprised that, until now, operators have not fully grasped the opportunities available to them through SMS. The €3.5 billion of missed revenue can be earned by simply enhancing the text services that they offer customers. There doesn’t need to be a shift in consumer mobile behaviour - they can stick with their trusty SMS message, whilst the operator is able to create immediate results with additional revenue streams.”

Examples of the kind of services that could be introduced by operators to increase the value of text messages include:

-SMS money transfer: a service that allows global money transfers to contacts in your address book, merely by sending an SMS

-Corporate functionality for your mobile: providing, amongst other things, a text message ‘out-of-office’ alert for your mobile phone, copying text messages to email, allowing individuals to set when they can be contacted and avoiding calls or messages being received during busy meetings or when driving for example.

-Mobile advertising: placing targeted ads inside text messages as they are sent that offer specific deals or offers. These could be offered free to users as advertisers fund the service.

Désiré has been musing and writing about technology during a career spanning four decades. He dabbled in website building and web hosting when DHTML and frames were en vogue and started writing about the impact of technology on society just before the start of the Y2K hysteria at the turn of the last millennium. Following an eight-year stint at where he discovered the joys of global tech-fests, Désiré now heads up TechRadar Pro. Previously he was a freelance technology journalist at Incisive Media, Breakthrough Publishing and Vnunet, and Business Magazine. He also launched and hosted the first Tech Radio Show on Radio Plus.