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Mobile Messaging Marlet Brief - February 2012

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Snapshot of the global mobile messaging space in 2012

Snapshot of the global mobile messaging space in 2012

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  • 1. 2012 MARKET BRIEFING Brought to you FREE by Portio Research Mobile Messaging Futures 2012-2016 Analysis and Growth Forecasts for Mobile Messaging Markets Worldwide: 6th Edition An introduction to the USD 231 billion worldwide mobile messaging market, SMS, OTT, MMS, mobile e-mail and mobile instant messaging. www.portioresearch.com
  • 2. Market Brief 2012 – Mobile Messaging © 2012, Portio Research. All Rights Reserved 1
  • 3. Market Brief 2012 - Mobile Messaging Portio Research Limited. Published February 2012 by Portio Research Limited © Copyright 2012. www.portioresearch.com info@portioresearch.com Disclaimer and Legal Notices Disclaimer Every care has been taken in the preparation of this study to ensure that the information contained herein is accurate, factual and correct to the best of our knowledge, at time of publishing. All opinions, suppositions, estimates and recommendations included in this document are solely the opinions of the authors unless otherwise stated. Portio Research Limited accepts no liability for any loss or damage or unforeseen consequential loss or damage arising from the use of the information contained within this document. The opinions, suppositions, estimates and recommendations within this document cannot be guaranteed, and readers use this information at their own risk. The information published in this document is subject to change without notice at any time, and Portio Research Limited accepts no liability or obligation to inform the reader of such changes. Portio Research Limited do not promote or endorse any specific companies or products, the views and opinions we express in this document are wholly our own assessments, and independent from any external interest or influence. Many terms and phrases and trade names used in this document are proprietary and Portio Research Limited recognises and acknowledges that all trademarks are copyright, belonging to their respective owners. Where possible, this document accords such terms and phrases and trade names to their respective owners. All Rights Reserved. No part of this document can be copied, shared, redistributed, transmitted, displayed in the public domain, stored or displayed on any internal or external company or private network or electronic retrieval system, nor reprinted, republished or reconstituted in any way without the express written permission of the publisher. Forwarding of this electronic document without the correct legal licence is theft. It’s unethical, immoral and against the law. If you have any questions about the legal licence conditions under which this document has been distributed, please contact Portio Research on info@portioresearch.com If you did not buy this document and a colleague or associate has sent it to you, do not assume you are legally entitled to read it, it is your responsibility to ensure you have the correct legal licence to read this document. 2 © 2012, Portio Research. All Rights Reserved
  • 4. Market Brief 2012 - Mobile Messaging Contents Introduction ......................................................................................................................... 6 Worldwide Mobile Market ................................................................................................... 7 Subscribers.................................................................................................................................... 7 Penetration .................................................................................................................................... 7 Mobile Messaging Market ................................................................................................... 9 SMS.................................................................................................................................... 10 Spain ........................................................................................................................................... 12 Pakistan....................................................................................................................................... 14 OTT Messaging Services .................................................................................................. 16 Drivers for the Adoption of OTT Messaging Services ..................................................................... 17 MMS ................................................................................................................................... 18 Canada........................................................................................................................................ 19 Mobile E-mail..................................................................................................................... 20 Argentina ..................................................................................................................................... 21 Mobile IM ........................................................................................................................... 22 Nigeria ......................................................................................................................................... 23 Conclusion ........................................................................................................................ 24 Read more................................................................................................................................... 24 About Mobile Messaging Futures 2012-2016................................................................................. 25 © 2012, Portio Research. All Rights Reserved 3
  • 5. Market Brief 2012 - Mobile Messaging List of Figures Figure 1: Figure 2: Figure 3: Figure 4: Figure 5: Figure 6: Figure 7: Figure 8: Figure 9: Figure 10: Figure 11: Figure 12: Figure 13: Figure 14: 4 Comparison of Mobile Messaging Services ................................................................ 6 Mobile Subscriber Base – Worldwide (In Million, 2009 – 2016F) .................................. 7 Mobile Messaging Revenue – Worldwide (In USD Billion, 2009 – 2016F) .................... 9 SMS Traffic and SMS Use per Subscriber per Month – Spain (2009 – 2011) ............. 12 Break-out of SMS Traffic – Spain (In Percent, H1 2011)............................................ 13 Break-out of SMS Revenue – Spain (In Percent, H1 2011) ....................................... 13 SMS Traffic and SMS Use per Subscriber per Month – Pakistan (2009 – 2011) ......... 15 Drivers of OTT Messaging Services ......................................................................... 17 MMS Traffic – Worldwide (In Billion, 2009 – 2016F) .................................................. 18 MMS Traffic and MMS Use per Subscriber per Year – Canada (2009 – 2011) ........... 19 Mobile E-mail Penetration – Worldwide (In Percent, 2009 – 2016F) ........................... 20 Mobile E-mail Penetration – Argentina (In Percent, 2009 – 2011) ............................. 21 Mobile IM Penetration – Worldwide (In Percent, 2009 – 2016F)................................. 22 Mobile IM Penetration – Nigeria (In Percent, 2009 – 2011) ........................................ 23 © 2012, Portio Research. All Rights Reserved
  • 6. Market Brief 2012 - Mobile Messaging List of Tables Table 1: Table 2: Table 3: Table 4: Table 5: Mobile Penetration – Regional (In Percent, 2009 – 2016F) .............................................. 8 Growth of SMS – Worldwide (In Billion, 2000 – 2016F) .................................................. 10 Messaging Traffic: SMS vs. OTT (In Billion, 2010 – 2016F) ........................................... 16 Country’s Contribution to Regional Subscriber Base and MMS Traffic – North America ..... (In Percent, 2011) ........................................................................................................ 19 Mobile Messaging contribution to Data Revenues – Regional (In Percent, 2011 & 2016F) .. .................................................................................................................................... 24 © 2012, Portio Research. All Rights Reserved 5
  • 7. Market Brief 2012 - Mobile Messaging Introduction In the last year, there has been a huge shift in mobile messaging markets. One of the biggest themes under discussion in the mobile messaging industry is this issue of ‘the end of SMS’ and the booming rise of Over-the-Top (OTT) messaging apps (or ‘next generation’ messaging services). However, hype permeates OTT media reports, and there is much misunderstanding within the mobile industry about how OTT services are being used, and how popular they are. In 2011, the worldwide mobile messaging market was worth USD 202 billion. Serious money indeed. Not least because messaging provides the backbone of mobile operators’ non-voice revenues. The following figure compares the five mobile messaging services – SMS, MMS, mobile email, mobile IM and OTT messaging services – on the basis of four parameters (simplicity, ease of use, cost and handset compatibility) that take both the demand and supply sides into account. Figure 1: Comparison of Mobile Messaging Services SMS MMS Mobile Email Simplicity Ease of Use Mobile IM OTT Messaging Services Cost Handset Compatibility Source: Portio Research Ltd. 6 © 2012, Portio Research. All Rights Reserved
  • 8. Market Brief 2012 - Mobile Messaging Worldwide Mobile Market Subscribers At end-2011, worldwide mobile subscribers stood at nearly 6 billion. This subscriber base is now projected to grow at a Compound Annual Growth Rate (CAGR) of 6 percent between 2011 and 2016, and is expected to cross 8 billion by end-2016. The figure below illustrates subscriber growth worldwide from 2009 to 2016. 1 Figure 2: Mobile Subscriber Base – Worldwide (In Million, 2009 – 2016F) Mobile Subscriber Base (In Million) 8,400 6,485.5 6,939.1 7,339.6 7,695.8 8,003.1 5,977.8 6,300 5,341.4 4,655.8 4,200 2,100 0 2009 2010 2011 2012F 2013F 2014F 2015F 2016F Year Source: Portio Research Ltd. F – Forecasted The emerging markets of Asia Pacific, and Africa and Middle East, with CAGRs of more than 7.7 percent and 7.4 percent respectively over 2011–2016, are expected to drive the growth of the worldwide mobile subscriber base. The Asia Pacific region, including the giants China and India, is clearly the largest mobile market worldwide. Asia Pacific’s subscribers constituted 50.7 percent of the worldwide mobile subscriber base in 2011, while the second largest contributor was Europe with 18.3 percent. Penetration Worldwide mobile penetration reached 86.1 percent at end-2011, and will near 110 percent by end-2016. In terms of mobile penetration, Asia Pacific and Africa and Middle East are the only regions not to have reached the 100 percent mark by the end of 2011. Europe leads with a mobile penetration exceeding 130 percent; North America and Latin America place second and third respectively. 1 Note: This market brief is derived from a report that was researched in the fourth quarter of 2011. As such, quoted full year 2011 figures throughout this brief use data collected from the first three quarters of 2011 and estimations for the fourth unavailable quarter. © 2012, Portio Research. All Rights Reserved 7
  • 9. Market Brief 2012 - Mobile Messaging The table below shows regional and worldwide mobile penetration rates for the period 20092016. 2 Table 1: Mobile Penetration – Regional (In Percent, 2009 – 2016F) Mobile Penetration (In Percent) Region 2009 2010 2011 2012F 2013F 2014F 2015F 2016F Europe 125.1 127.4 131.4 133.6 135.4 136.8 137.8 138.5 Asia Pacific 55.7 67.1 77.6 85.1 92.0 97.9 103.1 107.4 North America 92.1 98.1 102.6 106.7 110.3 113.4 116.0 118.1 Latin America 84.7 93.0 100.4 106.7 110.9 113.5 115.5 116.6 Africa and Middle East 56.1 65.0 71.2 77.1 81.8 85.7 88.9 91.3 Worldwide 68.5 77.8 86.1 92.3 97.7 102.3 106.1 109.2 Source: Portio Research Ltd. Asia Pacific’s subscribers constituted 50.7 percent of the worldwide mobile subscriber base in 2011, while the second largest contributor was Europe with 18.3 percent. 2 8 Note: Worldwide figures for mobile penetration are the weighted mean averages of the regional mobile subscriber base and regional population base for all five regions, not the arithmetic mean averages of mobile penetration for the five regions. © 2012, Portio Research. All Rights Reserved
  • 10. Market Brief 2012 - Mobile Messaging Mobile Messaging Market The worldwide mobile messaging market was worth USD 202 billion in 2011. This number is forecast to rise to USD 310.2 billion by end-2016, at a CAGR of 9 percent between 2011 and 2016. Asia Pacific generated the highest mobile messaging revenue in 2011 and Latin 3 America produced the least. Among the mobile messaging services scrutinised in this report, SMS yielded the highest revenue for operators in 2011 and mobile IM gathered the least revenue. The figure below depicts worldwide mobile messaging revenue during 2009-2016. Mobile Messaging Revenue (In USD Billion) Figure 3: Mobile Messaging Revenue – Worldwide (In USD Billion, 2009 – 2016F)4 350 259.0 280 281.7 298.8 310.2 2015 F 2016F 231.0 202.0 210 174.9 148.4 140 70 0 2009 2010 2011 2012F 2013F 2014F Year Source: Portio Research Ltd. F – Forecasted In 2011, average messaging ARPU stood at USD 35.7 and is expected to increase for at least the next four years to reach USD 39.7 in 2015. In 2016, owing to the comparatively slower growth in worldwide messaging revenue than subscriber numbers, average messaging ARPU is expected to see a dip, albeit only slight. 3 4 Note: Revenue forecasts for OTT messaging services have not been included because the OTT market is still too nascent and many of the services are yet to be monetised. Moreover, there is significant overlap between OTT messaging services and mobile IM services. Note: This market brief is derived from a report that was researched in the fourth quarter of 2011. As such, quoted full year 2011 figures throughout this brief use data collected from the first three quarters of 2011 and estimations for the fourth unavailable quarter. © 2012, Portio Research. All Rights Reserved 9
  • 11. Market Brief 2012 - Mobile Messaging SMS SMS still has an amazing future. SMS is not dead. SMS is still the king and will remain so for some time to come. The only region seeing a serious dip in SMS revenue at all over the next five years is North America, and that is in some ways because of the mistakes that have been made over pricing in the last few years. SMS is a profit powerhouse, and even in those markets forecast to witness some decline, the market will remain at least ‘as good as it is now’ for a few years yet. SMS generated the highest revenue in 2011, and SMS revenue is forecast to dominate worldwide mobile messaging over the next five years to 2016. While SMS made the highest contribution to worldwide mobile messaging revenue in 2011 with a 63.5 percent share; in 2016, SMS will continue to lead other messaging services, but its revenue share will have eroded to sub-50 percent. The table below shows the growth of SMS from 2000 to 2016. Table 2: 5 Growth of SMS – Worldwide (In Billion, 2000 – 2016F) Year SMS Traffic (In Billion) Year SMS Traffic (In Billion) 2000 146.4 2009 5,225.6 2001 218.0 2010 6,834.5 2002 366.0 2011 7,843.7 2003 450.0 2012F 8,599.7 2004 760.6 2013F 9,162.9 2005 1,056.4 2014F 9,443.5 2006 1,662.4 2015F 9,639.3 2007 2,778.0 2016F 9,554.2 2008 3,972.9 Source: Portio Research Ltd. However, SMS is at its peak. And while the demise of SMS has been greatly exaggerated, the mobile and wireless community worldwide needs to face the fact that nothing lasts forever, and no product or service or company stays in place as number one forever. Look how Nokia has lost its dominant global brand strength, and how Apple has risen; look how CDs were replaced by MP3s; look how cheques were replaced by credit and debit cards, which may now possibly be replaced by NFC-enabled smartphones over the next 20 years; and look at how Hotmail gave way to Gmail. Trends, fashions, favourites, all come and go. SMS will eventually yield to new services. 5 Note: This market brief is derived from a report that was researched in the fourth quarter of 2011. As such, quoted full year 2011 figures throughout this brief use data collected from the first three quarters of 2011 and estimations for the fourth unavailable quarter. 10 © 2012, Portio Research. All Rights Reserved
  • 12. Market Brief 2012 - Mobile Messaging In 2011, worldwide SMS revenue stood at USD 128.2 billion and is forecast to grow at a CAGR of 3.7 percent to settle at USD 153.6 billion by end-2016. SMS revenue’s year-onyear (y-o-y) growth slowed down in 2011 compared to 2010’s level due to the falling prices of SMS, unlimited SMS bundle packs and the growing popularity of OTT messaging services. SMS is now being clubbed with almost all the plans and packages offered by mobile network operators (MNOs). During 2011-2016, the SMS revenue growth rate is expected to subside and turn negative in 2016. With over 42 percent contribution to worldwide SMS revenue in 2011, Asia Pacific continued its leading position worldwide in terms of SMS revenue. Country-level data for SMS in Spain (Europe) and Pakistan (Asia Pacific) follows on the coming pages. SMS data for Europe is proving very interesting this year, with several clear trends emerging. Four of the Western European "Big 5" markets are still showing healthy growth; Spain – with a recent decline in SMS traffic – is the exception. This makes Spain an interesting market to look at, because Spain has long been one of the most advanced markets in Europe, and often what happens in Europe happens in Spain first. Asia Pacific, the world's largest SMS market, still shows a picture of broad overall growth in SMS traffic, though there are signs that growth is now slowing. While organic market growth (increasing numbers of mobile subscribers) is still helping to drive up overall SMS traffic in the majority of the region’s markets, growth in terms of average-usage-per-subscriber per month is levelling off across most markets in Asia Pacific. One market that is recording impressive growth is Pakistan. Here, annual SMS traffic achieved nearly 40 percent year-on-year growth in 2011. Pakistan’s performance also helps to highlight the regional variance that occurs across North Africa, the Middle East, and Central Asia. © 2012, Portio Research. All Rights Reserved 11
  • 13. Market Brief 2012 - Mobile Messaging Spain  In 2011, Spain’s SMS traffic dropped to 8.4 billion, primarily due to the growing popularity of OTT messaging services. Spain is a highly advanced country and users have actively started using data services. In 2010, a swift movement of subscribers was witnessed from SMS to OTT/next generation messaging services; the trend continued in 2011.  Consequently, average monthly SMS use per subscriber has declined to 12.4 messages  According to comScore data published in October 2011, the percentage of mobile subscribers using SMS services in Spain is the lowest among the top five European countries – those being the UK, Italy, France, Germany and Spain  In Spain, text messages are rarely included in monthly tariff plans and thus SMS is relatively expensive in the country compared to neighbouring markets  In 2011, Spain recorded a y-o-y decline of 25 percent in New Year text messages  Even though the country’s SMS traffic is witnessing a significant decline, revenue generated from the A2P SMS segment is showing strong growth. For example, In H1 2011, Telefonica Spain reported y-o-y growth of 23.7 percent in its A2P SMS revenue. SMS Traffic (In Billion) 20 29.9 32 15 10 24 13.0 8.4 2010 5 12.4 8.6 19.1 2011 0 16 8 0 2009 SMS use per Subscriber per Month Figure 4: SMS Traffic and SMS Use per Subscriber per Month – Spain (2009 – 2011) Year SMS Traffic SMS per Subscriber per Month Source: Portio Research Ltd. 12 © 2012, Portio Research. All Rights Reserved
  • 14. Market Brief 2012 - Mobile Messaging Figure 5: Break-out of SMS Traffic – Spain (In Percent, H1 2011) 39.0% 51.2% 0.9% 2.0% On-Net National SMS Off-Net National SMS International SMS 6.9% SMS Value-added Service Roaming SMS Source: CMT Spain Figure 6: Break-out of SMS Revenue – Spain (In Percent, H1 2011) 33.0% 23.1% 35.5% 2.5% On-Net National SMS Off-Net National SMS International SMS 5.9% Roaming SMS SMS Value-added Service Source: CMT Spain © 2012, Portio Research. All Rights Reserved 13
  • 15. Market Brief 2012 - Mobile Messaging Pakistan  Annual SMS traffic in Pakistan has shown significant y-o-y growth, and achieved nearly 40 percent growth in 2011 over 2010  Between 2009-2011, SMS traffic grew at a CAGR of more than 55.7 percent to cross 257 billion at end-2011, from 106.1 billion in 2009  Pakistan’s contribution to Asia Pacific’s SMS traffic increased to 6.6 percent in 2011, even though its contribution to the region’s subscriber base decreased to 3.8 percent  Average monthly SMS use is seeing an upward trend, primarily owing to several SMS packages being offered by Pakistan’s operators and subscribers’ increased familiarity with mobile devices and their functionalities  All MNOs have introduced a wide range of attractive SMS-bundle packages. Daily, weekly, fortnightly and monthly unlimited SMS packages are being offered to subscribers at very low rates. Nearly 80 percent of total SMS traffic generated in Pakistan is exchanged using these bundle packages, and the remaining 20 percent is charged on a flat rate of PKR 1 (USD 0.01) per SMS.  Pakistan’s government makes efforts to control the type of information being shared using messaging services and social networking sites. This has impacted the growth of SMS traffic in the country both positively and negatively – depending on the decision taken by the government and telecommunication regulators. o For example, the Pakistani government blocked Facebook for two weeks in May 2010 after a competition page encouraged users to post caricature drawings of the Prophet Muhammad. This boosted SMS traffic in that month, with mobile operators recording 5 percent growth in their monthly SMS traffic because Facebook users shifted to SMS as an alternative medium for communication. o In September 2011, Lahore’s high court directed the Pakistan ministry of information and technology to block access to all the websites, especially Facebook, spreading religious hatred. While the final decision is still pending, if implemented, blanket-banned users will seek alternative mediums to message one another. o The Pakistan Telecommunication Authority (PTA) has asked mobile operators to block all text messages containing offensive words and phrases. On 14 November 2011, the PTA issued a list of unacceptable phrases and more than 1,700 words – some more obvious than others – and requested MNOs to implement SMS filtering from 21 November 2011 onwards. However, the rule has been challenged by civil rights groups as being censorship and contravening the right to freedom of speech. Mobile operators have also challenged the decision because such a rule is expected to hit SMS traffic significantly, resulting in lower SMS revenue. Due to the on-going debate and negotiations between the parties – PTA, civil rights groups and MNOs – the PTA withdrew the timeframe for the ban and will now impose this after the list of words is finalised among the parties. Post implementation, MNOs will be required to submit a monthly briefing to the PTA detailing the number of SMSs blocked. A fine will be imposed on operators if any SMS containing banned terminology is allowed. Moreover, operators will have to disconnect the SIM cards of users who persistently try to send such messages. 14 © 2012, Portio Research. All Rights Reserved
  • 16. Market Brief 2012 - Mobile Messaging Figure 7: SMS Traffic and SMS Use per Subscriber per Month – Pakistan (2009 – 2011) SMS Traffic (In Billion) 200 154.3 210 140 150 94.3 257.1 100 186.5 70 50 106.1 0 0 2009 2010 SMS use per Subscriber per Month 195.7 280 2011 Year SMS Traffic SMS per Subscriber per Month Source: Portio Research Ltd. © 2012, Portio Research. All Rights Reserved 15
  • 17. Market Brief 2012 - Mobile Messaging OTT Messaging Services The growth of OTT messaging apps is in an explosive stage, and they are rapidly gaining in popularity, though as yet, they are not generating any significant revenues. Currently, the majority of OTT services are free, or ‘almost free’. Mobile Internet is a prerequisite for these services and they are basically a mix of messaging-based mobile applications, device/OS specific messaging services, social networking IM clients and Internet messaging portals. OTT messaging traffic spiked from 2009 to 2010, and this volume growth continued on to hit 3.5 trillion messages in 2011. With the ever increasing uptake of smartphones and mobile data services, Portio Research forecasts this growth to continue at a CAGR of 42.2 percent and reach 20.3 trillion by end2016 – a staggering number which Portio believes is still extremely conservative. However, this forecast does not mean that OTT messaging will cannibalise over 20 trillion text messages. Portio Research sees OTT and SMS traffic growing side by side, synergistically, as the overall volume of mobile P2P messaging increases dramatically. It seems OTT may effectively slow down the growth of SMS over the next few years, but little ‘cannibalisation’ will occur in the short term. Portio believes that as more new messaging mediums become available, so consumers adopt the new ways alongside the old ways and communicate more and more. Analyzing combined SMS and OTT messaging traffic, we forecast that traffic will increase from over 11 trillion messages in 2011 to 29.8 trillion messages in 2016. The table below depicts this. Table 3: Messaging Traffic: SMS vs. OTT (In Billion, 2010 – 2016F) Traffic (In Billion) Worldwide 2010 2011 2012F 2013F 2014F 2015F 2016F SMS Traffic 6,834.5 7,843.7 8,599.7 9,162.9 9,443.5 9,639.3 9,554.2 OTT Traffic 1,297.1 3,491.6 5,846.2 8,993.7 12,682.1 16,426.1 20,293.1 Source: Portio Research Ltd. Portio spoke to a number of key messaging industry players while researching this report, and most broadly agreed that OTT services are not ‘instant SMS killers’. Clearly OTT services are a significant new category, with lots of growth ahead. However, for the foreseeable future, Portio Research believes they still do not pose a significant threat to SMS at a worldwide level. 16 © 2012, Portio Research. All Rights Reserved
  • 18. Market Brief 2012 - Mobile Messaging Drivers for the Adoption of OTT Messaging Services Figure 8: Drivers of OTT Messaging Services Smartphone Penetration Rising smartphone penetration will definitely provide a boost to the OTT messaging user base Popularity of Mobile Applications The majority of OTT messaging services are marketed in the form of mobile apps Pricing Most OTT messaging services are either free or almost free, which is a very inviting proposition for users. Greg Woock, the Chief Executive of Pinger, commented: “It always comes down to the economics. Free is a compelling price point.” Expanding Ecosystem OTT messaging services are extending the messaging ecosystem to various devices such as iPod Touch and tablets Brand Strength Some services like BBM or Apple iMessage are being used because of the associated brands. However, they are also pivotal in increasing brand loyalty and awareness. Increasing data network coverage As a result of the investments and efforts made by MNOs, data services are now available to ever more mobile subscribers. This in turn increases the accessibility of OTT messaging services among mobile subscribers. Withdrawal of messaging bundles Some of the actions of MNOs have also paved the way for the uptake of OTT messaging services. For example: in the US, AT&T has withdrawn capped messaging bundles and offers only two messaging plans to subscribers: an unlimited messaging plan for USD 20, or a usage based SMS plan at USD 0.20 per SMS. This has forced medium-to-low texting users to look for other cheaper options. Initiatives taken by MNOs In order to tap the popularity of OTT messaging services, a few MNOs have launched their own OTT apps. This will enable MNOs to completely own the revenue benefits from OTT messaging services beyond just the regular data charges. It will also help them to increase their subscribers’ loyalty. Source: GSMA and Portio Research Ltd. © 2012, Portio Research. All Rights Reserved 17
  • 19. Market Brief 2012 - Mobile Messaging MMS Around 207 billion MMS were generated in 2011, representing a y-o-y growth rate of nearly 6 percent. Traffic is now forecast to reach close to 277 billion by end-2016, after increasing at a CAGR of 6 percent during 2011-2016. The next figure shows worldwide MMS traffic during 2009-2016. Figure 9: MMS Traffic – Worldwide (In Billion, 2009 – 2016F) 300 245.9 259.1 270.3 276.8 2015F 2016F MMS Traffic (In Billion) 228.4 200 195.7 207.2 169.1 100 0 2009 2010 2011 2012F 2013F 2014F Year Source: Portio Research Ltd. F – Forecasted Launched after the initial success of SMS to deliver multimedia content, MMS has until recently been the second greatest revenue generating non-voice service. However, in 2011, mobile e-mail outperformed MMS in revenue terms. Despite stiff competition, our forecasts show that MMS will generate total revenue of USD 183.2 billion over the years 2012-2016. MMS growth is slowly easing off. By the end of the forecast period in this report, growth in MMS traffic and MMS revenues will have almost levelled off completely. But we must still recognise growth. We are not forecasting decline, just decline in growth. MMS still generates in excess of USD 30 billion per annum and both traffic and revenues are expected to continue growing every year for the next five years. Country-level data for MMS in Canada (North America) follows on the next page. 18 © 2012, Portio Research. All Rights Reserved
  • 20. Market Brief 2012 - Mobile Messaging Canada  The Canadian MMS market grew by 10.6 percent in 2011  MMS use per subscriber per year increased y-o-y by over 4.1 percent in 2011 to exceed 36 MMS  By end-2010, Canadian operators covered over 90 percent of the population with their advanced networks to support and enhance the multimedia messaging experience MMS Traffic (In Million) 1000 40 36.2 34.8 32.8 800 32 600 24 400 919.6 831.2 729.2 16 200 8 0 0 2009 2010 MMS use per Subscriber per Year Figure 10: MMS Traffic and MMS Use per Subscriber per Year – Canada (2009 – 2011) 2011 Year MMS Traffic MMS per Subscriber per Year Source: Portio Research Ltd. While annual MMS use per subscriber reached 36.2 in Canada in 2011, the figure for the US market was 178.6 – after a near 6 percent y-o-y decrease. North America’s trends are majorly affected by performance in the US. This is evident from the mere 0.3 percent growth in MMS traffic in North America in 2011, even though Canada registered growth of 10.6 percent in 2011; Canada’s impact on the growth of regional MMS traffic is very minimal. The table below drives this point home. Table 4: Country’s Contribution to Regional Subscriber Base and MMS Traffic – North America (In Percent, 2011) Country Contribution to Subscriber Base (In Percent, 2011) Contribution to MMS Traffic (In Percent, 2011) Canada 7.33 1.60 The US 92.67 98.4 Source: Portio Research Ltd. © 2012, Portio Research. All Rights Reserved 19
  • 21. Market Brief 2012 - Mobile Messaging Mobile E-mail Mobile e-mail outperformed MMS for the first time in revenue-terms in 2011, making it the second most successful mobile messaging service based on revenues generated worldwide. The worldwide mobile e-mail user base stood at 669.5 million at end-2011, representing year-on-year growth of over 41 percent. By end-2016, Portio projects that the mobile e-mail user base will cross 2.4 billion, growing at a CAGR of 29.4 percent during 2011-2016. Mobile e-mail generated USD 32.7 billion in revenue worldwide in 2011, and this figure is expected to break USD 75 billion by end-2016, after growing at a CAGR of over 18 percent during 2011-2016. Figure 11: Mobile E-mail Penetration – Worldwide (In Percent, 2009 – 2016F) Mobile E-mail Penetration (In Percent) 35% 30.4% 30% 26.0% 25% 21.8% 17.9% 20% 14.3% 15% 10% 11.2% 7.2% 8.9% 5% 0% 2009 2010 2011 2012F 2013F 2014F 2015F 2016F Year Source: Portio Research Ltd. F – Forecasted Obviously mobile e-mail has gained greatest acceptance in the enterprise sector, however this picture is starting to change as smartphone penetration deepens. Consumers are increasingly using mobile e-mail too, thanks to advanced handsets and broader availability of high speed mobile networks. However, opinion among the vendor community is somewhat split on the uptake issue. While everyone we spoke to agrees that mobile e-mail has mostly been an enterprise sector service up until now, some vendors believe consumer mobile e-mail is taking off, and others think it will remain largely an enterprise service. We believe mobile e-mail will increase in popularity in the consumer segment, existing alongside SMS, OTT services and social networking. There is so much messaging traffic on social networking sites, and so much rapidly-exchanged ‘chatter’ on IM and OTT services, that important messages can easily get lost or missed and we believe consumers will use email alongside these other services as a way of keeping the more important messages separate from the ‘daily noise’. Country-level data for mobile e-mail in Argentina (Latin America) follows on the next page. 20 © 2012, Portio Research. All Rights Reserved
  • 22. Market Brief 2012 - Mobile Messaging Argentina  Just 9.3 percent of Argentinean mobile subscribers were using mobile e-mail services at end-2011, even though smartphones and multimedia phones represented 60 percent of the handset market  As of end-September 2011, 3G subscribers formed 14.7 percent of the total mobile subscriber base  MNOs continue to push data services in the country: Claro Argentina has launched Internet packs for varying data usage levels (unlimited, 512 MB, 200 MB, 100 MB and 25 MB); and Telecom Personal has launched Internet packs based on duration and data usage (1 GB in one day, 2 GB in two days and 3 GB in a week). This variety in Internet plans gives greater flexibility and choice to subscribers. Figure 12: Mobile E-mail Penetration – Argentina (In Percent, 2009 – 2011) Mobile E-mail Penetration (In Percent) 8 6 9.3 4 6.6 2 4.0 0 2009 2010 2011 Year Source: Portio Research Ltd. © 2012, Portio Research. All Rights Reserved 21
  • 23. Market Brief 2012 - Mobile Messaging Mobile IM The boundary between OTT messaging services and mobile IM services is getting blurred. Quite often, people use the two interchangeably and fail to understand which service should fall under which category. OTT messaging service users and mobile IM users do have a large overlap; however, OTT service users availing messaging mobile apps that deliver messages as SMS/MMS (iMessage, Jaxtr for example) do not form part of mobile IM users. Similarly, all mobile IM users who use SMS to access IM portals do not constitute OTT messaging service users. Instant Messaging is constantly growing, and in a small way eroding some SMS market share, but IM uptake is hampered by the broad array of walled-garden services and the lack of interoperability among those services. Also, until recently, low smartphone penetration and low 3G penetration have also been barriers to adoption. Mobile IM generated the lowest revenue in the mobile messaging market in 2011 – but it will surpass MMS revenue by end-2016. In 2011, mobile IM users accounted for 7.9 percent of the worldwide mobile subscriber base. This penetration is projected to rise to 30.9 percent by end-2016. Figure 13: Mobile IM Penetration – Worldwide (In Percent, 2009 – 2016F) Mobile IM Penetration (In Percent) 35% 30.9% 30% 24.6% 25% 19.2% 20% 14.6% 15% 10.9% 7.9% 10% 4.2% 5.7% 5% 0% 2009 2010 2011 2012F 2013F 2014F 2015F 2016F Year Source: Portio Research Ltd. F – Forecasted Mobile IM generated worldwide revenues of over USD 10 billion in 2011, representing y-o-y growth of nearly 50 percent. Annual mobile IM revenue is forecast to near USD 43 billion by end-2016, growing at a CAGR of 33.2 percent during 2011-2016. Country-level data for mobile IM in Nigeria (Africa and Middle East) follows overleaf. 22 © 2012, Portio Research. All Rights Reserved
  • 24. Market Brief 2012 - Mobile Messaging Nigeria  Mobile IM remains in its early stages of adoption and development within Nigeria  MTN Nigeria slashed its BlackBerry Social and messaging bundle plans to provide its BlackBerry users with unlimited access to social networking sites and instant messaging at cheaper rates  In February 2011, Nedjma partnered with Palringo to launch a nationwide affinity-based mobile IM network  Nigerian mobile IM penetration was approaching 4 percent at end-2011 Figure 14: Mobile IM Penetration – Nigeria (In Percent, 2009 – 2011) Mobile IM Penetration (In Percent) 5 4 3 2 3.9 2.9 1 1.8 0 2009 2010 2011 Year Source: Portio Research Ltd. © 2012, Portio Research. All Rights Reserved 23
  • 25. Market Brief 2012 - Mobile Messaging Conclusion Messaging will continue to be vitally important to MNOs around the world. The contribution messaging makes to total MNO data revenues is actually set to grow over the next 5 years, as other services suffer greater marginalisation and messaging holds as a profitable business. Messaging is far from losing its appeal – it’s set to continue to be ever more significant. As the next table shows, the contribution of mobile messaging revenues to worldwide data revenue is still more than 65 percent and is expected to reach 66.4 percent in 2016. Table 5: Mobile Messaging contribution to Data Revenues – Regional (In Percent, 2011 & 2016F) Region Mobile Messaging contribution to Data Revenues (In Percent, 2011) Mobile Messaging contribution to Data Revenues (In Percent, 2016F) Europe 59.0 62.5 Asia Pacific 66.6 68.2 North America 60.1 44.8 Latin America 53.9 83.6 Africa and Middle East 63.9 73.0 Worldwide 65.6 66.4 Source: Portio Research Ltd Read more Portio Research has been tracking the worldwide mobile messaging market since 2003. This market brief is derived from the findings of the sixth report in our flagship mobile messaging series (Mobile Messaging Futures 2012-2016). If you have any questions or if we can be of any assistance to you, please contact us by e-mail: info@portioresearch.com or phone: +44 (0)1249 656964 Portio Research Ltd is an independent UK-based research company, specialising in the mobile and wireless sector. Portio is focused on providing high quality, data-centric reports based on hard facts and proven numbers, rather than hype and speculation. www.portioresearch.com 24 © 2012, Portio Research. All Rights Reserved
  • 26. Market Brief 2012 - Mobile Messaging About Mobile Messaging Futures 2012-2016 Mobile Messaging Futures 2012-2016 Analysis and Growth Forecasts for Mobile Messaging Markets Worldwide: 6th Edition Complete with groundbreaking five-year OTT user and traffic forecasts, the sixth edition of our best selling messaging report is now available to order. This new edition is packed with detailed market analysis, traffic and revenue forecasts, and comes with new sections on SMS hubbing, and mobile marketing and advertising. This massive 376-page market study gives you all the data you need for SMS, OTT messaging, MMS, mobile e-mail and mobile IM markets worldwide, and includes a BONUS Executive Summary presentation. With essential insight into the future of SMS and OTT within a wider market that will be worth USD 310 billion by end-2016, this is one of the most detailed and popular reports ever written on the worldwide mobile messaging market. Please click here for more details. Condensed Table of Contents Chapter 1: Chapter 2: Chapter 3: Chapter 4: Chapter 5: Chapter 6: Chapter 7: Chapter 8: Chapter 9: Chapter 10: Chapter 11: Chapter 12: Introduction Worldwide Mobile Market Mobile Messaging Market SMS SMS Hubbing Mobile Marketing and Advertising OTT Messaging Services MMS Mobile E-mail Mobile IM Summary and Conclusions Appendices (includes full glossary of terms) A complete Table of Contents with a full list of the 367 Figures and Tables is available online here; a product brochure is available here. Portio Research Ltd is a UK-based research company focussing on the mobile space, providing reports, handbooks, directories and database products. If you have any questions or if we can be of any assistance to you, please contact us by e-mail: info@portioresearch.com Copyright 2012. Portio Research Limited 2012 www.portioresearch.com © 2012, Portio Research. All Rights Reserved 25