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Social messaging: Friend or foe?

Nurdianah Md Nur | April 15, 2013
Even though social messaging has caused the decline of SMS usage, it can be advantageous to telecommunications operators when used appropriately.

Instead of seeing social messaging as an enemy to avoid, telecommunications operators should find ways to monetise it, according to a new report by global analyst firm Ovum that examined the findings of its Consumer Insights Survey.

More customers are turning to social messaging apps as they are either free or cost a minimal fee as compared to SMS. The switch is further driven by the increased adoption of smart devices and increased affordability of mobile broadband.

Inevitably, telecommunication operators have seen a decline in SMS revenue. In Ovum's report, 34 percent of Skype users and 51 percent of WhatsApp users claimed that they have decreased their SMS usage due to social messaging.

The report also revealed that Australia, Brazil, China, and France have experienced the highest adverse impact on SMS.

Interestingly though, social messaging did increase the SMS usage of respondents from Germany, Russia and US, indicating a possibility of monetising social messaging.

Mark Ranson, consumer analyst at Ovum and co-author of the report, suggests that telecommunications operators use social messaging to grow a social platform as it can drive high engagement and increase customer retention. Operators can then use this stable foundation to offer monetisable services such as games, utility payments, personalisation and communication.

"The trick is to continue to find micro-opportunities because allied to other forms of revenues, such as advertising and more premium services, and multiplied by a huge scale, they can be extremely lucrative," said Ranson. 

Line is an example of this; the South Korean social messaging service generated about US$30 million in the second half of 2012 from the sale of premium emoticons.

 

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