Mobile Messaging Marlet Brief - February 2012

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2012 MARKET BRIEFINGBrought to you FREE by Portio Research

Mobile Messaging Futures 2012-2016Analysis 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.

© 2012, Portio Research. All Rights Reserved 1

Market Brief 2012 – Mobile Messaging

2 © 2012, Portio Research. All Rights Reserved

Market Brief 2012 - Mobile Messaging

Portio Research Limited.

Published February 2012 by Portio Research Limited © Copyright 2012.


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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



List of Figures

Figure 1: Comparison of Mobile Messaging Services ................................................................ 6 Figure 2: Mobile Subscriber Base – Worldwide (In Million, 2009 – 2016F) .................................. 7 Figure 3: Mobile Messaging Revenue – Worldwide (In USD Billion, 2009 – 2016F) .................... 9 Figure 4: SMS Traffic and SMS Use per Subscriber per Month – Spain (2009 – 2011) ............. 12 Figure 5: Break-out of SMS Traffic – Spain (In Percent, H1 2011) ............................................ 13 Figure 6: Break-out of SMS Revenue – Spain (In Percent, H1 2011) ....................................... 13 Figure 7: SMS Traffic and SMS Use per Subscriber per Month – Pakistan (2009 – 2011) ......... 15 Figure 8: Drivers of OTT Messaging Services ......................................................................... 17 Figure 9: MMS Traffic – Worldwide (In Billion, 2009 – 2016F) .................................................. 18 Figure 10: MMS Traffic and MMS Use per Subscriber per Year – Canada (2009 – 2011) ........... 19 Figure 11: Mobile E-mail Penetration – Worldwide (In Percent, 2009 – 2016F) ........................... 20 Figure 12: Mobile E-mail Penetration – Argentina (In Percent, 2009 – 2011) ............................. 21 Figure 13: Mobile IM Penetration – Worldwide (In Percent, 2009 – 2016F) ................................. 22 Figure 14: Mobile IM Penetration – Nigeria (In Percent, 2009 – 2011) ........................................ 23



List of Tables

Table 1: Mobile Penetration – Regional (In Percent, 2009 – 2016F) .............................................. 8 Table 2: Growth of SMS – Worldwide (In Billion, 2000 – 2016F) .................................................. 10 Table 3: Messaging Traffic: SMS vs. OTT (In Billion, 2010 – 2016F) ........................................... 16 Table 4: Country’s Contribution to Regional Subscriber Base and MMS Traffic – North America .....

(In Percent, 2011) ........................................................................................................ 19 Table 5: Mobile Messaging contribution to Data Revenues – Regional (In Percent, 2011 & 2016F) ..

.................................................................................................................................... 24



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 e-

mail, 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

Source: Portio Research Ltd.

SMS MMS

Mobile E-mail Mobile IM

OTT Messaging Services

Simplicity Ease of Use Cost Handset Compatibility



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.

Figure 2: Mobile Subscriber Base – Worldwide (In Million, 2009 – 2016F)1


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.

4,655.8

5,341.4

5,977.8 6,485.5

6,939.1 7,339.6

7,695.8 8,003.1

0

2,100

4,200

6,300

8,400

2009 2010 2011 2012F 2013F 2014F 2015F 2016F

Mobile S

ubscri

ber

Base

(I

n M

illion)

Year



The table below shows regional and worldwide mobile penetration rates for the period 2009-

2016.

Table 1: Mobile Penetration – Regional (In Percent, 2009 – 2016F)2

Region

Mobile Penetration (In Percent)

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


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 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.



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

America produced the least. Among the mobile messaging services3 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.

Figure 3: Mobile Messaging Revenue – Worldwide (In USD Billion, 2009 – 2016F)4


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 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.

4 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.

148.4 174.9

202.0 231.0

259.0 281.7

298.8 310.2

0

70

140

210

280

350

2009 2010 2011 2012F 2013F 2014F 2015 F 2016F

Mobile M

essagin

g R

evenue

(I

n U

SD

Billion)

Year



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: Growth of SMS – Worldwide (In Billion, 2000 – 2016F)5

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


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.



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-on-

year (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.



Spain

Figure 4: SMS Traffic and SMS Use per Subscriber per Month – Spain (2009 – 2011)


19.1

8.6 8.4

29.9

13.0 12.4

0

8

16

24

32

0

5

10

15

20

2009 2010 2011

SM

S u

se p

er

Su

bscrib

er

per

Mo

nth

SM

S T

raffic

(In

Bill

ion

)

Year

SMS Traffic SMS per Subscriber per Month

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.



Figure 5: Break-out of SMS Traffic – Spain (In Percent, H1 2011)

Source: CMT Spain

Figure 6: Break-out of SMS Revenue – Spain (In Percent, H1 2011)

Source: CMT Spain

51.2%

39.0%

6.9% 2.0% 0.9%

On-Net National SMS Off-Net National SMS SMS Value-added Service

International SMS Roaming SMS

35.5%

33.0%

23.1%

5.9% 2.5%

On-Net National SMS Off-Net National SMS SMS Value-added Service

International SMS Roaming SMS



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.



Figure 7: SMS Traffic and SMS Use per Subscriber per Month – Pakistan (2009 – 2011)


106.1

186.5

257.1

94.3

154.3

195.7

0

50

100

150

200

0

70

140

210

280

2009 2010 2011

SM

S u

se p

er

Su

bscrib

er

per

Mo

nth

SM

S T

raffic

(In

Bill

ion

)

Year

SMS Traffic SMS per Subscriber per Month



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 end-

2016 – 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)

Worldwide

Traffic (In Billion)

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


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.



Drivers for the Adoption of OTT Messaging Services

Figure 8: Drivers of OTT Messaging Services

Source: GSMA and Portio Research Ltd.

Smartphone

Penetration

Rising smartphone penetration will definitely provide a boost to the OTT messaging user base

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.”

Popularity of Mobile

Applications

The majority of OTT messaging services are marketed in the form of mobile apps

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.

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.

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.

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.



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)


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.

169.1

195.7 207.2

228.4 245.9

259.1 270.3 276.8

0

100

200

300

2009 2010 2011 2012F 2013F 2014F 2015F 2016F

MM

S T

raff

ic

(In B

illion)

Year



Canada

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


Figure 10: MMS Traffic and MMS Use per Subscriber per Year – Canada (2009 – 2011)


729.2 831.2

919.6

32.8 34.8

36.2

0

8

16

24

32

40

0

200

400

600

800

1000

2009 2010 2011

MM

S u

se p

er

Su

bscrib

er

per

Year

MM

S T

raffic

(In

Mill

ion

)

Year

MMS Traffic MMS per Subscriber per Year

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



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.

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 e-

mail 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.

Figure 11: Mobile E-mail Penetration – Worldwide (In Percent, 2009 – 2016F)


F – Forecasted

7.2% 8.9%

11.2%

14.3%

17.9%

21.8%

26.0%

30.4%

0%

5%

10%

15%

20%

25%

30%

35%

2009 2010 2011 2012F 2013F 2014F 2015F 2016F

Mo

bile

E-m

ail

Pen

etr

atio

n

(In

Perc

en

t)

Year



Argentina

Figure 12: Mobile E-mail Penetration – Argentina (In Percent, 2009 – 2011)


4.0

6.6

9.3

0

2

4

6

8

2009 2010 2011

Mobile

E-m

ail

Penetr

atio

n

(In P

erc

ent)

Year

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.



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.

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.

Figure 13: Mobile IM Penetration – Worldwide (In Percent, 2009 – 2016F)


F – Forecasted

4.2% 5.7%

7.9%

10.9%

14.6%

19.2%

24.6%

30.9%

0%

5%

10%

15%

20%

25%

30%

35%

2009 2010 2011 2012F 2013F 2014F 2015F 2016F

Mo

bile

IM

Pen

etr

atio

n

(In

Perc

en

t)

Year



Nigeria

Figure 14: Mobile IM Penetration – Nigeria (In Percent, 2009 – 2011)


1.8

2.9

3.9

0

1

2

3

4

5

2009 2010 2011

Mobile

IM

Penetr

atio

n

(In P

erc

ent)

Year

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



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: [email protected] 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

http://www.portioresearch.com/en/reports/current-portfolio/mobile-messaging-futures-2012-2016.aspx





About Mobile Messaging Futures 2012-2016

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: [email protected] Copyright 2012. Portio Research Limited 2012


Mobile Messaging Futures 2012-2016

Analysis and Growth Forecasts for Mobile Messaging Markets Worldwide: 6th Edition

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http://www.portioresearch.com/en/reports/current-portfolio/mobile-messaging-futures-2012-2016.aspx

http://www.portioresearch.com/media/1677/MMF12-16_ToC.pdf

http://www.portioresearch.com/media/1676/MMF12-16_brochure_Feb12.pdf

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Mobile Messaging Marlet Brief - February 2012