Usage of the short messaging service (SMS), the most-widely used mobile application across the world, is on the wane in India, thanks to cannibalisation by over-the-top (OTT) applications such as WhatsApp and Skype.

Over the past 15 months, there has been a 20-30 per cent fall in SMSes, an erosion caused largely by OTT apps.

“It’s cannibalisation…. Apart from impacting revenues, OTT applications are also cluttering the network,” says Hemant Joshi, Partner at Deloitte Haskins & Sells.

The flipside is that OTT apps need a data service, which mitigates the operator’s revenue loss to an extent.

Unfair competition “It’s unfair competition as OTT apps use the highway (infrastructure and network) created by the service providers,” says Joshi. OTT apps help in exchanging text, audio and video content over the Internet. The commonly used OTT apps are BBM, Facebook Messenger, WeChat, WhatsApp and Hike. There are free video and voice calling apps such as Skype and Viber, and social media platforms such as Twitter.

“SMS as a category is declining as OTT applications are eating into it. It is actually a behavioural issue that is happening in the industry,” says Raju Vanapala, CEO of free SMS portal Way2sms.com.

Way2sms.com buys SMS from operators at 22 paisa each and provides it free-of-cost. The company, which has more than 40 million users, gets its revenue from advertisements.

In India, about 8-10 billion SMSes are sent on an average day, mostly commercial messages across the total mobile user base of 905 million and some landlines.

According to a Juniper Research study, operators worldwide will lose $14 billion to OTT services this year, a 26 per cent increase from 2013.

So, is the SMS on its last leg? “While a large number of SMS users are moving into OTT apps, a similar quantum is sending SMSes for the first time. So, it’s being compensated,” claims Himanshu Kapania, MD of Idea Cellular.

However, OTT applications have not made much of an impact on voice revenues.

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