SMS is now an integral part of the communication strategy

Short Message Service or SMS as we all know it, is a messaging standard specified by ETSI (European Telecommunication Standards Institute). The first SMS was sent over the Vodafone GSM network in Dec 1992 in the United Kingdom. The earliest use case for SMS as a key communications channel was as an alert application by operators wherein they started sending SMS messages to subscribers to notify them that they had voicemail. However the turning point was when the operators launched the service, which enabled the subscribers to send messages from the phone to other phones (called P2P messaging). The operators started charging the subscriber and the SMS industry was born. According to Wikipedia, SMS text messaging is the most widely used data application on the planet, with 2.4 billion active users, or 74 percent of all mobile phone subscribers sending and receiving text messages on their phones.

According to Portio Research, mobile messaging is a fast growing and exciting industry, generating revenues of 130 billion USD worldwide in 2008, and this figure is set to rise to a market value of 224 billion USD by full year 2013. As per their recent report, SMS still accounts for the majority of that revenue, and SMS will remain the most dominant mobile messaging format for most of the next decade. SMS has generated revenues of 89 billion USD in 2008, and the world has seen traffic of almost 3.5 trillion SMS messages in 2008. The report forecasts that SMS will become a 100 billion USD business by 2010, and worldwide total traffic will reach almost 5 trillion messages in FY 2011, and growth will continue from there.

As the market and growth for voice services gets saturated, mobile operators in most parts of the world are focusing their attention on Mobile Value Added Services (MVAS) for additional revenues and differentiation. In the Indian context, a recent report from IAMAI and eTechnology Group@IMRB forecasts MVAS revenues to be 9760 crores by end June 2009 which is further forecast to grow to 16520 crores by end June 2010. The bulk of the revenue contribution comes from P2P messaging (37 percent), which is exchange of SMS messages between mobile subscribers. The peer/person-to-application (P2A) or application-to-peer/person (A2P) messaging contributes about 16 percent of the revenues.>>>