Mobile instant messaging services hurt telcos

Ovum urges mobile operators to fight against the negative impact of MIMS to SMS revenues.

In a new report the independent telecoms analyst firm focuses on South Korea, a nation with arguably the highest penetration rate for MIMS in the world, and extracts lessons that can be applied by global carriers in the fight against free-to-use MIMS.

Mark Ranson, Ovum’s Analyst comments:

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. MNOs 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.

Unfortunately for carriers, SMS cannot compete with the features and user experience that smartphone applications offer, and MIMS usage levels are therefore likely to continue to rise. It is time for MNOs to plan new post-SMS messaging services that are better capable of competing with OTT players’ offerings.

However, carriers should be aware that launching standalone MIMS is the wrong strategy in most cases. 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. 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. 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.