European mobile messaging traffic to grow 92%, revenues 10%

Source: Telecompaper

Forrester predicts that total traffic from all mobile messaging types will grow by 92% over the next five years. Person-to-person short message service (SMS) will drive most of this growth, both this year and at the end of 2010. However, revenues from SMS, mobile multimedia messaging service (MMS), video messaging, instant messaging presence services (IMPS*), and mobile email will only grow by 10% — to €21 billion by the end of 2010 — as unit prices drop.

Michelle de Lussanet, Principal Analyst, Telecom Markets at Forrester says: “This year, the average European mobile subscriber will send 40 messages (of any type) per month. This number will nearly double in five years, to 72 per month. By then, Europeans will collectively exchange more than 23 billion mobile messages each month. SMS will remain the biggest traffic driver. Much of the growth will come from youngsters — 10- to 15-year-olds — who increasingly own mobile phones and almost 80% of whom use SMS. No other messaging service will beat SMS’s combination of low price, simplicity, accessibility, and usability.”

Forrester Identifies Country Differences In SMS Usage Growth

Forrester predicts the following country differences in per-user SMS growth in Western European nations between 2005 and 2010:

The (s)low growers: France and Netherlands. On average, slow-growing countries like France and the Netherlands saw active SMS users send only two more messages per month in 2004 compared with 2002, and Forrester does not expect that growth rate to accelerate. The other “slow-growth” countries are Austria, Portugal, Sweden, Finland, and Greece.
The medium grower: Ireland. Although Ireland will be the biggest SMS sender in 2005 — with 84% of active users sending 106 SMSes a month — it will see only moderate growth through 2010. Germany and Norway are the other medium-growth countries.
The fast growers: Denmark and Switzerland. While Ireland will lead in the number of SMSes per month in 2005, Denmark will outperform it beginning in 2007 — culminating in 123 SMSes per user per month in 2010. Switzerland experienced vast growth of 80% between 2002 and 2004 and will continue to grow quickly through 2010. The other fast growers are Luxembourg, Spain, Italy, and the UK.
Messaging Revenues Grow Despite SMS’s Declining Proceeds

Although mobile messaging traffic will almost double over the next five years, revenues will only rise 10% — from €19 billion in 2005 to €21 billion in 2010 — as operators reduce unit prices to stay competitive. Surprisingly, SMS won’t drive this growth; in fact, SMS revenues will take a dive. P2P SMS prices fell 65% between 2001 and 2005, and will continue to erode through 2010.

Pan-European MMS revenues, however, will grow strongly — and explode ninefold in the next five years, to more than €5 billion per year by 2010. Video messaging uptake will be slow due to its high cost; but even if each person sends just two per month in 2010, they will generate almost €1 billion — 56 times as much as today. IMPS revenues will grow the fastest, accounting for 8% of total mobile messaging revenues in 2010 — more than either mobile email or video messaging.

* IMPS = Instant messaging enhanced with presence services that lets users see which of their buddies are online and available to chat.
** P2P (person-to-person) as opposed to P2A (person-to-application) or A2P (application-to-person).