SMS revenues in Middle East and Africa to hit US$2.58 billion

Total revenue for SMS in the MEA for 2006 ended on US$1.2 billion and is expected to edge up to US$2 billion by 2010 according to a recent study by UK based Portio Research.

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By  Christopher Reynolds Published  February 21, 2007

A recent report by Portio Research estimates SMS revenues in the MEA region to reach US$2.58 billion by 2012, with worldwide revenues predicted to surpass US$67 billion during the same period. Total revenue for SMS in the MEA for 2006 ended on US$1.2 billion and is expected to edge up to US$2 billion by 2010 according to the study. Portio’s projections for MMS were not so encouraging, with MEA revenues hovering around US$0.2 billion at the end of 2007 and growing to just US$0.4 billion by 2012. John White, business development manager Portio Research, told CommsMEA that the application of MMS had been misunderstood at an early stage, leading to exaggerated expectations. “We have argued that SMS is such a huge success because it is such a useful easy and cheap service, whereas MMS is not necessarily any of those things. It is more complex, more expensive and it does not serve the same level of utility that SMS serves. It was hyped from day one that it would be a successor to SMS, but that was never going to happen” said White. “It is more of an entertainment application rather than a messaging one. It is successful but people are always measuring it against SMS and making it look like a failure,” he added. By 2012, the report predicts mobile instant messaging (MIM) will supplant SMS as the mainstream messaging service as smartphones and wireless internet proliferate, especially in markets such as North America. Operators, the report suggests, need to strike a balance between SMS and IM pricing in order to prevent the cannibalisation of SMS revenues in the future. However, it will still take time for advanced services such as mobile email and IM to gain traction in the less developed markets of Africa and the Middle East, according to White. “Obviously the Middle East has some very advanced markets but in general the MEA region is going to have a low uptake of MMS, IM and mobile email, due to high poverty levels and large rural areas. So when people do get ultra cheap handsets they are going to be interested in doing little other than using basic voice or SMS functions,” he said.

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