Messaging Revenue Down as Messaging Apps Take Off


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As popular social networking sites such as Facebook become populated with, well, everyone, teens are now escaping to the relative privacy that messaging apps provide. WhatsApp and SnapChat are now two of the most popular mobile apps, and it seems this trend is affecting more than just Facebook and social media.

Market research firm Strategy Analytics this week pointed out that messaging revenue for mobile providers may have peaked in 2012. The firm estimates that global mobile operator revenue from SMS and MMS declined in 2013, down nearly 4% from last year to around $104 billion. The firm's report predicts that this trend will continue, with operator revenues from messaging falling 20% by the year 2017.

"The fast rising popularity of smartphone messaging applications, both from smartphone vendors Blackberry and Apple, and independent messaging applications like WhatsApp, Line Messenger and WeChat, is significantly hurting both operator messaging volumes and revenue," said Nitesh Patel, director for Wireless Media Strategies at Strategy Analytics. "While SMS volumes remained flat in 2013, operator revenue from messaging declined by almost 4 percent"

In addition to the popularity of messaging apps that use data rather than operator messaging services, messaging revenue is likely be affected by the increased saturation of established markets. The U.S. mobile market in particular is quickly running out of potential new subscribers, which could potentially lead to stagnating messaging volumes. Strategy Analytics predicts that SMS volumes alone will fall 3% by the year 2017.