Social messaging apps 'lost networks $13.9bn in 2011'

A woman sends a message on her smartphone Social messaging costs remain the same - even for messages sent globally

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Social messaging applications cost mobile network operators $13.9bn (£8.8bn) in lost SMS revenue last year, a report has claimed.

Analysis firm Ovum studied global use of popular services like Whatsapp, Blackberry Messenger and Facebook chat.

It concluded that mobile operators must "work together to face the challenge from major internet players".

Industry experts say operators can offset any losses through effective costing plans by mobile networks.

The report gathered usage statistics from the leading social messaging applications typically used on smartphones across the world.

As well as well-known names from popular social networks in the Western world, the study also included apps such as MXit - a massively popular program used mainly in South Africa.

Social messaging apps make use of a smartphone's internet connection to send messages rather than the usually far costlier SMS - short message service - system.

Start Quote

It's a growing threat which is manageable through the right tariffs and the right costing”

End Quote James Barford Mobile analyst

However, the study did not factor in the extra income networks received from mobile data costs because of increased internet usage resulting from social messaging.

The research's author, Neha Dharia, said operators must look to work closely with the big players in social messaging.

"Operators must remain open to partnering with app developers, sharing end-user data with them and allowing integration with the user's social connections," she said.

"Working closely with handset vendors will also be important; they control some of the most popular social messaging apps, and can also provide preloaded applications."

Avoiding costs

James Barford, a mobile analyst for Enders, said while the figures seemed huge, social messaging still only represented a tiny part of overall mobile communication.

A Whatsapp Services like Whatsapp are gaining popularity - and for some users is becoming a replacement for SMS

"It isn't a huge amount of the global industry," Mr Barford told the BBC.

"A lot of those people using those types of apps are using them to avoid international messaging.

"Sometimes they are avoiding costs that they wouldn't have paid anyway - maybe in the replacement of email or some other method of communication."

Mr Barford added that a study conducted in April 2011 by research firm Comscore suggested that 4% of UK smartphone users had sent a message on Whatsapp that month.

Another survey, carried out in June 2011 by YouGov, showed that the huge majority of smartphone users - 81% - still considered SMS the key way to send messages on a mobile.

"I think it's a growing threat which is manageable through the right tariffs and the right costing," Mr Barford added.

"People are still using the mobile networks to communicate - and they're willing to pay for that."

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