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Mobile operators should co-operate on messaging: Ovum

Zafar Anjum | June 5, 2012
Mobile carriers should plan new post-SMS messaging services to compete with OTT players’ offerings

How should mobile carriers respond to the sliding SMS revenues because of the negative impact of mobile instant messaging services (MIMS) which are free?

Ovum, the independent telecoms analyst firm, looked into this issue, in the context of South Korea. It is a nation with arguably the highest penetration rate for MIMS in the world.

"The threat of MIMS is real, but the next generation of messaging services also poses an opportunity for carriers prepared to adapt to the new climate," says Mark Ranson, Ovum's Analyst. "MNOs (mobile network operators) have co-operated in the past to create interoperability in SMS, and interoperability will remain crucial to the success of the next generation of messaging services."

According to Ovum, the problem is SMS cannot compete with the features and user experience that smartphone applications offer, and MIMS usage levels are therefore likely to continue to rise.

Therefore, mobile carriers should plan new post-SMS messaging services to compete with OTT (Over the Top) players' offerings.

However, cautions Ovum, carriers should be aware that launching standalone MIMS is not the right strategy in most cases.

For example, South Korean operators have tried this strategy, but so far these offerings have not been able to gain as much traction as leading OTT players KakaoTalk, Daum, and MAD Smart.

The South Korean experience is likely to be repeated internationally, says an Ovum report. For those mobile carriers that have not yet launched standalone MIMs, it is better to skip this phase, and instead begin developing services in collaboration with fellow carriers.

"Operators should co-operate with each other and also with handset vendors to help combat OTT player messaging services," says Ranson. "The resulting interoperability will be necessary to generate the scale needed to compete with leading OTT players. SMS is highly interoperable, and operators' new messaging services must retain this interoperability if they are to have a chance of remaining a key revenue stream."


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