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Decline in Messaging Revenue Around the Corner, Analyst Predicts

by Todd Haselton | November 12, 2012November 12, 2012 7:00 pm PST

Chetan SMS

Mobile operators make their money from selling data packages (43% of their revenues), unlike in the past when a lot of the revenue came from text messages. Now, it appears that the mobile messaging revenue that carriers report each quarter is beginning to plateau.

A recent report from Chetan Sharma consulting found that data revenues during the third quarter of this year were $19.9 billion, up 3% from the second quarter and up 17% from the same quarter last year. However, revenue from messaging, and SMS traffic overall, is expected to fall soon. “It might be early to say if the decline has begun or the market segment will sputter along before the decline takes place,” Sharma noted in a report obtained by FierceWireless. “Once the market segment reaches the 70-90 percent penetration mark, the decline begins and we might be seeing the start of the decline in messaging revenue¬†The decline is primarily due to the rise in IP messaging and operators have been slow to evolve their strategies in the segment.”

Verizon and AT&T, the nation’s two largest carriers, also have 69% of the grip of all data service revenues according to Chetan’s data for the third quarter. The two carriers also have 66% of all wireless customers in the United States, a pretty stunning figure.

[via FierceWireless, GigaOm]

Todd Haselton

Todd Haselton has been writing professionally since 2006 during his undergraduate days at Lehigh University. He started out as an intern with...