Instant popularity with the youth

Nayan Taneja, a second year law student has sent only five SMS's since he bought his new BlackBerry phone in September last year. “Who's going to message when you can BBM?” he says. His friends nodded along. Each of the youngsters gave their own reasons as to why instant messaging is more fun than sending a boring SMS.

“SMS is passé. It takes too long to wait for a person to respond via SMS. People reply immediately if you WhatsApp or BBM them. It's possible to know if the person has received the message as well,” said Shreya Mishra, a self-confessed BBM addict.

The Short Message Service (SMS) which gained great prominence in the early 2000s is now being challenged by alternative messaging modes.

Data compiled by the Telecom Regulatory Authority of India for the September to December 2008 quarter (from 25 in September 2008 to 29 in December 2008) showed that outgoing SMS per subscriber was an increasing trend – an increase of 16 per cent. In contrast, data for the September to December 2011 quarter shows a huge decline in SMS figures. Outgoing SMS per subscriber per month declined by 22.6 per cent from 45 in the quarter ending September 2011 to 34 in the quarter ending December 2011.

Number crunching

Instant Messaging services like WhatsApp Messenger, BBM and Nimbuzz are becoming extremely popular with the youth. These are however, posing stiff competition to the revenue generating, humble SMS. Mobile companies have reported steadily declining SMS numbers to these instant messaging services. For example, Loop Mobile has seen a marginal decline of 5-7 per cent per subscriber per month usage due to BBM and WhatsApp Messenger.

“The primary reason for this shift is the quick response time and the ability to have longer conversations over long distances, even between different countries, without any extra cost using IM vis-à-vis SMS. Additionally IMs also gives users an opportunity to share information, music, images, files, etc. and virtually play interactive games together,” said Ms. Annie Mathew, Head of Alliances, RIM, India. There are over 55 million BBM users and 380 BBM-connected apps available in App World. This represents 20 per cent of the daily downloads from App World.

One of the reasons attributed to the decline in the SMS figures by TRAI is the introduction of a ceiling on SMS numbers by TRAI to curb Unsolicited Commercial Communications, as this is the 1{+s}{+t} full quarter after the Regulation.

But Mr. Joby Babu, Head – Operations, Nimbuzz feels that the decline in SMS is largely due to the boom in instant messaging, “There is no doubt about the fact that instant messaging has seen an exponential growth in the last one year. Operators are definitely losing money due to declining SMS figures. The users of Nimbuzz have increased to 81 million from 35 million last year. Through Nimbuzz, people can do a variety of things apart from real time chatting”, he said.

In addition to sending text messages, the instant messaging platforms offer a whole bunch of other things. For example Nimbuzz users can get horoscopes, catch the latest cricket scores, check weather updates, book travel tickets and even access gaming. “Instant messaging will soon become like a social entertainment platform. We plan to introduce a ‘virtual avatar' on Nimbuzz through which a series of activities can take place in a ‘virtual economy'. We are also planning to introduce ticketing systems through the application,” said Mr Babu.

The increasing interest in the instant messaging space has also raised private equity interest in this space. Mangrove Capital Partners, MIH Group and Holtzbrinck Ventures had all participated in the financing of $10 million in Nimbuzz.

Mr Anuj Kumar, CEO, Affle which has an instant messaging service, Pinch, said, “Yes it is much easier to get investments now. We have a 30 to 40 per cent month on month growth rate. People have become greater communication junkies now and so data based services will definitely grow in the coming few years.”

Price factor

Data on the Nokia website shows that most of the top 5 downloaded applications (2011) from the Ovi store belong to the instant messaging category. These include Facebook chat, eBuddy Messenger and WhatsApp Messenger.

Pricing is another factor for the decline in SMS numbers. Blackberry Messenger users, for instance, get to send an unlimited number of messages for a flat fee of Rs 129 per month. There are also a number of free platforms like Rocketalk. This looks quite attractive compared to an average of Rs1 per SMS tariff charged by mobile operators.

“The SMS rates have not kept pace with the low call tariffs. There is still a lot of skew in the pricing,” points out Mr Surya Mahadevan, COO, Loop Mobile.

The revenue from SMS was 7.79 per cent of the overall GSM revenue in September 2011. This decreased to 7.20 per cent in December 2011, according to data from TRAI. But operators feel that the decline in SMS's at this point is not very alarming. They however, hope that the revenue generating SMS would make a come-back at some point.

“It will pick up once again when you have a language SMS and when SMS's are not just black and white – they have got colour and visual animation. The tariff also needs to be rationalised,” says Mr Mahadevan. And if that doesn't happen, telecom companies would have to bid good bye to SMS.

SMS Killers

Blackberry Messenger: Black-Berry Messenger (BBM) is among the most popular IM platforms. But BBM doesn’t let you send messages to a myriad of networks. BBM only sends messages to other BlackBerry devices. You can send messages of unlimited length, receive message delivery confirmation, and share media like photos and video with multiple contacts at once. You can easily create groups of contacts to message them all at once, such as a group for your class or yoga group.

Google Talk: Makes it easy to chat with other Google Talk users. Google Talk is available for Android and BlackBerry phones as a standalone client and for iOS devices as an optimized web site. The Android and BlackBerry versions sport custom notifications and multiple chat windows.

WhatsApp Messenger : This is a cross-platform mobile messaging app which allows you to exchange messages without having to pay for SMS. WhatsApp Messenger is available for iPhone, BlackBerry, Android, Windows Phone and Nokia and yes, those phones can all message each other.

Because WhatsApp Messenger uses the same internet data plan that you use for email and web browsing, there is no extra cost to message and stay in touch with your friends.

COMMENT NOW