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SMS traffic sliding in Singapore

Publication Date : 31-05-2012


SMS traffic is falling in Singapore, signalling the start of a decline in a key revenue stream for telcos.

Figures on the Infocomm Development Authority's website show the decline started in December last year, when the monthly total number of SMSes exchanged dropped to 2.3 billion from a record high of 2.46 billion in September.

The latest reported figure for March shows a further dip - to 2.2 billion.

The fading allure of SMS is most likely tied to the rise of alternative messaging services such as Facebook and Twitter. More consumers are also switching to better-value smartphone apps for their messaging needs, analysts say.

Globally, SMS traffic is also slowing in most developed nations such as France and Spain.

"The golden days of SMS are over," said senior research manager Alex Chau at research firm IDC Asia-Pacific.

"WhatsApp and MSN Messenger, among other instant messaging apps, are replacing SMS."

Messaging apps like WhatsApp and Viber allow consumers to send an unlimited number of messages; in SMS plans, there is usually a monthly cap of 300 or 500 free messages before additional charges kick in.

Both SingTel and StarHub have said they may launch their own Internet-based messaging services.

SMS volume in recent years has included more messages sent by companies to consumers for marketing purposes - such as bank loan advertisements and property launches - but even these corporate "spammers" are switching to smartphone apps to broadcast their promotions.

This, in turn, has cost the telcos dearly.

Market research firm Ovum estimated that operators worldwide lost US$13.9 billion in SMS revenue last year due to Web-based messaging services.

Singapore figures are unavailable and, when asked, SingTel and StarHub declined to disclose how their SMS revenues have been eroded by the rise of other messaging services like smartphone apps.

The telcos said, however, that any fall in SMS revenue was buffered by the increased sale of mobile data services.

The sale of mobile data for M1 has been a growing source of revenue for the company, even as SMS continues to lose its shine.

For the quarter ending March, mobile data made up 23.1 per cent of service revenues of $192 million (US$149 million), of which SMS contributed 13.8 per cent.

StarHub's reported mobile revenue in the same period increased 4 per cent to $307 million (US$238 million), as it added more subscribers and as customers spent more on data plans, the telco said.

SingTel's mobile revenues for the quarter ending March rose 5.1 per cent to $478 million (US$371 million).


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