In amongst all the 3GSM feeding frenzy on mobile IM and social networking, you may be wondering what had happened to dear old SMS. After all, it’s still the biggest profit earning service for most operators.
Yet with the furrowed brows over IM cannibalisation of SMS revenues, you’d be forgiven for thinking that SMS’ days were in some way numbered. Not so, say analysts at Portio Research who, despite predicting an “exciting future” for other messaging technologies, think that SMS revenues will continue to grow, despite declining prices, reaching $67 billlion by 2012. That said, the quality of mercy is strained at Portio, because they also think that by 2011, IM will be the dominant messaging technology in the USA, and mobile operators are going to have to cut their cloth to suit.
The message then, is that there is still plenty of scope for SMS in developing markets but in others, where IM has a deep hold in the PC world, mobile IM will be more of a threat. Well, up to a point.
This is relevant to a messaging giant such as LogicaCMG, say, that tries to sell its SMSCs and MMSCs in on the back of its systems integrator contacts in developed markets, such as Europe. Perhaps eyeing that breaking free of this successful but increasingly limited business model was going to be more trouble than it was worth, LogicaCMG made the decision to offload its messaging and telecom business, into the waiting arms of private equity.
Headed up by former LogicaCMG man Larry Quinn, Atlantic Bridge Venture’s angle is to get into emerging markets, and into the US where LogicaCMG is weak, through an expanded set of channel relationships. It also hinted that it would consider acquiring other companies to exploit the opportunities for next gen IP based messaging.
It seems that this is a clear sign that the established order messaging is breaking down. The old SMS dominant players are far from confident about their relevance as the industry moves forward, despite the convincing talk. There is an element of “back to the future” about Acision, as if the ex-Logica people involved felt there was unfinished business still in SMS, in the markets LogicaCMG left untouched because of its business model. That is fair enough, but it is the other part of the strategy – the next gen messagin, IP convergence piece in its existing markets that is of most interest. Here there are genuinely disruptive players and models emerging. Does Acision want to be part of that, or do its best to ignore it?