Basics: SMS
SMS stands for Short Message Service, which is the formal name for text messaging. It's a way to send short, text-only messages from one phone to another. These messages are usually sent over a cellular data network barring iMessage. Standard SMSes are limited to 160 characters per message, including spaces.
The recent survey by Nielson, India, states that mobile chatting applications backed by internet are becoming more popular day by day and it’s replacing usage of SMS inside India. SMS’s in India normally chargeable after certain limits whereas chat applications like WhatsApp, Nimbuzz etc. are absolutely free as it comes under internet data pack
The Downfall:
The biggest advantages of these internet powered messengers are, they are free and doesn’t bear any cost. Today on an average Indian are using these chat applications for at least 27 minutes a day whereas usage of SMS is now merely 2 SMS per day.
The trend is not only restricted to India, experts assert that the same trend will occur in China and US market also. There is a massive downfall of SMS usage in China as people have adopted chat applications like WeChat and Weibo for regular messaging services. For e.g. the per capita SMS usage in Beijing city has fallen from 42 to 36 a year ago and its increasing further.
After Effect:
The trend has created a dent in the revenue stream of many telecom operators as well. Bharti Airtel, one of the largest telecom operator in India, has witnessed a revenue downfall of 8.2% from SMS services. Last year this downfall was 11%. However, for the same period, Airtel’s revenue from data usage increased to 90% compared to last year revenue.
A similar trend has been experienced by Idea Cellular, however, its revenues from Internet usage is at the all-time high. Its 3G Data revenue per user has increased by Rs 20 and currently, it’s at Rs 109, which is exponential growth in terms of the Indian market.
The story is not merely confined to SMS, even Voice usage trends of Indians are giving negative signals to domestic telecom companies. In the last two years, telecom operators in India have successfully added an additional number of users to their subscriber base, however, usage of voice calls remains the same. For past two years, on an average, Indian are making nearly 7 calls a day. This figure is stagnant and not showing any growth.
Flood of smartphones are creating new eco-system wherein people are using Voice over Internet (VoIP) for calling any person in the world without any fee or charges helping them to keep their monthly billing low.
Many industry experts predict that revenues from SMS would slowly extinct in Asia and the rest of the world in coming years.
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