Blackberry Messenger, WhatsApp and Apple iMessage Cannibalize SMS Revenues
Boston, MA - December 21, 2011 – Year-over-year smartphone penetration doubled to reach 21 percent of wireless subscriptions by Q3 2011. Smartphones have stimulated healthy increases in non-SMS data revenues that continue to lift operator performance despite declining voice and static SMS markets. Strategy Analytics reported the impact of smartphone growth on Average Revenue per User (ARPU) in a new report, “Smartphone Penetration Doubles, Driving Non-SMS Data Growth
“Over last 12 months, while wireless ARPU fell eight percent and voice ARPU declined 13-14 percent, data ARPU increased by more than five percent,” noted Phil Kendall, Director Wireless Operator Strategies, and author of the report. “Non-SMS services—which have become the real driver of growth—increased from 55 percent of data revenues in Q3 2010 to 61 percent in Q3 2011.” This detailed data comes from the Strategy Analytics report, “Wireless Operator Performance Benchmarking, Q3 2011
,” which tracks performance of over 215 mobile operators, representing over 75 percent of global subscribers.
“Regionally, non-SMS data revenues grew to 54 percent of total data in Western Europe and 72 percent in North America,” Kendall added. “Smartphones for existing wireless customers are a principal source of ARPU uplift which operators cannot afford to ignore. Tapping into the next wave of smartphone adoption through lower cost devices and entry-level data plans will be crucial to medium-term operator revenue growth.”
Sue Rudd, Director of Service Provider Analysis at Strategy Analytics, pointed out, “Unfortunately smartphones are not a panacea and are accelerating the decline in SMS revenues as Over-The-Top (OTT) messaging platforms, such as Blackberry Messenger, WhatsApp and Apple iMessage, dramatically increase. As a result, SMS ARPU fell in all regions. Many operators face a tricky balancing act as they seek price points for data plans that are low enough to stimulate demand but high enough to compensate for SMS cannibalization.”