SMS growth and new apps will shake up SMSC competition

LONDON, UK: Mobile messaging provides a key revenue stream for mobile operators around the globe and despite the maturity of the market, it will continue to see good growth over the next five years according to the findings of ABI Research?s latest comprehensive study.

Between 2008 and 2014, the total market for mobile messaging will grow at a CAGR of nearly 8 percent, increasing from $132 billion in 2008 to $208 billion by 2014. But steady growth in the broad mobile messaging market masks changes that are shaking up both messaging services and the ways mobile network operators deliver, support, and charge for those services.

The business of providing Short Message Service Centers (SMSCs) – which manage SMS messaging operations – has long been one of recurring licensing and service support revenues. Operators have stayed with their legacy SMSC providers, avoiding updates to their infrastructure and opting instead to augment existing systems.

“While new networks provided opportunities for some competition between SMSC vendors, the majority of the market saw little change between SMSC vendors in existing deployments. Now, that is starting to turn around,” says ABI Research principal analyst Jonathan Collins.

Today, MNOs are increasingly investing in additional and replacement SMSC offerings. These hold out the promise of reduced operating costs and simpler equipment as well as a chance to rationalize operations that have grown in complexity over the years. New SMSCs also support a range of SMS services that deliver greater value and flexibility for users, and can cut the cost to MNOs.

“As MNOs increasingly look to support, expand and maximize revenues from their SMS services, there is increasing potential for a new wave of competition to impact SMSC vendors. Those that can best meet the cost and application demands of MNOs will have the greatest opportunity in years to increase their share of the market,” says Collins.