SMS remains the most popular two-way communications platform on the planet. In most cases, it’s inexpensive, casual, and discreet for users. It also represents one of the more profitable features offered by mobile network operators. And while SMS does face an increasingly fractured market, largely from the growth of messaging apps, it’s not going anywhere anytime soon. Here are 5 reasons why:
1) SMS is growing, not shrinking
Indeed, SMS is continuing to grow at an incredible rate globally. In 2011, more than 7.8 trillion SMS were sent worldwide. That vastly outpaces every other messaging platform combined. Over-the-top (OTT) messaging (instant messaging platforms like WhatsApp, iMessenger, BlackBerry Messenger, etc., also known as application-to-person) represent 3.5 trillion messages, combined. Multimedia messaging service (MMS) adds another 200 billion. The rate at which SMS are sent is increasing, and is expected to increase each year at least through 2016, according to several research firms.
2) SMS is a major revenue driver for mobile network operators worldwide
SMS represents 63.5% of mobile messaging revenue globally. And it represents somewhere around 10% of an average operator’s revenue streams. I have a hard time believing MNOs won’t think of ways to add value to SMS, or reduce the cost enough that it still makes sense for consumers.
In fact, there are multiple examples of them taking this step. For instance, SMS sent via first delivery attempt mechanism can potentially save money on 80%-90% of text messages. Clever bundling can also drive revenue: here in the United States, we bundle SMS with our calling plans, meaning there’s no ceiling to how many messages a given subscriber sends in a month on his or her plan. What’s the disincentive to use SMS?
3) SMS is platform agnostic and highly reliable
I can (and do) use iMessage with friends who also have iPhones. But what about friends who have Android-based mobiles? Colleagues whose businesses use BlackBerry devices? My mother, who uses a feature phone? To reach them, SMS is the most reliable option. This is due to the simple reason that it’s hard-coded into the global mobile infrastructure, requiring distribution across all phones and carriers.
What’s more is that I find iMessage and other chat applications to be unreliable. SMS, on the other hand, works even in extremely resource-limited conditions, including lack of internet access and even moments of cell tower traffic congestion. For example, in emergencies, texts have a higher chance of reaching people than other forms of communication. This level of low-resource ubiquity is unmatched in the global communications infrastructure.
4) Increasing use in business, government and non-profit sectors
SMS is seeing a dramatic increase as a tool for businesses, governments and non-profits to interact with large populations. For example, Detroit recently introduced a Text-My-Bus program that allows people using public transport to learn when the next bus is arriving at a given stop. Businesses are increasingly looking to SMS as an opportunity for advertising special prices or events to clients. UPS, for example, uses SMS to notify clients as to the progress of their package deliveries. And non-profits are increasingly participating in text-to-donate programs, where donors can send a brief message to a short phone number and a small donation is added to a cell phone bill. Most famously, the American Red Cross raised more than $43 million with its text-to-donate campaign following the 2010 earthquake in Haiti.
I suspect they choose SMS over a messaging service largely because user adoption rates are so high – see my previous point about SMS being platform agnostic. With so many mobile phones in circulation, there’s only one global messaging platform at the moment. For people wanting to reach a large audience via a convenient messaging feature, SMS is the only real option. As these services gain more traction, people will continue to interact with them via SMS.
5) Chat Is Attempting To Emulate SMS Success
Many analysts see built-in messenger apps, such as iMessage, WhatsApp, Mxit and others as a threat to SMS. These apps operate on a users’ data plan, rather than through the SMS protocol. The argument follows that in cases where data plans are cheaper than SMS plans, users will choose the least cost route, thus supplanting SMS as the most popular platform. To be fair, we’ve seen this happen in a few places. Hong Kong, Australia, and Finland have seen drops in SMS usage. In the US, SMS usage leveled off in 2011 for the first time. But a dip in usage does not translate to an evaporation of an entire platform. Indeed, SMS is still the most popular platform in the US, despite the relative ubiquity of iMessage, Blackberry Messenger and Facebook chat.
Portio Research takes this argument a step further, suggesting that messaging apps may only be an addition to an increasingly fragmented market, rather than being an SMS killer:
“Does a boost to one messaging type have to equate to a usage drop in another? Does it have to mean cannibalisation of SMS? What about synergy? Side by side traffic growth? And what of the other messaging mediums of MMS, mobile e-mail and mobile IM? After all, while messaging users love to communicate seamlessly, popular modes of communications do vary – and maybe OTT isn’t a replacement, but rather just one more segment of the messaging mix.”
At FrontlineSMS, we’d agree – multi-channel engagement doesn’t mean the end of SMS. It means a boom in mobile messaging across the board, including for SMS.
In an increasingly device-rich society, with wild differences in access to infrastructure and technologies of all kinds between the very poor and even the moderately well-off, multi-channel communications are critical if service providers and businesses are to engage effectively with everyone in a community, all of the time. Each platform and channel of communication has trade offs, and as we’ve argued elsewhere, your choice of platform not only presents opportunities – to sharing video, or messaging more cheaply across cell data – but can close doors to those without the kit or the credit to access them. Multi-channel approaches, such as the Praekelt Foundation’s Young Africa Live, which combines SMS with feature- and smart-phone apps and a website, offer the broadest possible number of options for individuals to engage with its message. Despite the brevity of the format, SMS has a valuable place in this spectrum, both as a lowest-common-denominator technology, and as a communications platform that often works when all others fail.
In a multi-channel world, where successful engagement and data capture are increasingly critical, and as businesses focus more and more on reaching previously difficult markets in low- and middle-income countries, who can afford to discount the world’s most accessible, most widespread, digital communications medium?