The FINANCIAL — Apps and free messenger services such as BlackBerry Messenger (BBM), WhatsApp, Viber and online Facebook chats are having little influence on mobile operators’ revenues from text messages.
The latest data provided by Geocell, one of the leading mobile operators in Georgia, shows an increase in the number of sent messages – 1,250,000,000 in 2010 compared to 1,400,000,000 in 2011.
This year Geocell officials are expecting about 1,550,000,000 SMSs by the end of 2012. Ilia Khutsishvili, Segments and Products Specialist, Marketing at Geocell, explained that such applications are dependent on internet access and will not lead to a reduction of SMSs.
Geocell is the only mobile operator company in Georgia to have shared its SMS statistics with the public. Other companies declared that their strategy has been changed and they prefer to leave such information confidential.
Experts also say that free SMS applications are not causing a reduction of the profits of mobile operator companies, as Wi-Fi does not yet have comprehensive coverage which means that consumers have to buy mobile internet. The experts therefore presume that the profit made from sold mobile internet packages equalizes the loss of unsent SMSs.
Three mobile operator companies in Georgia (Magticom, Geocell and Beeline) in total have 4 million registered users, out of which only 10 percent has smartphones, according to the statistics provided by experts. So the risk that mobile operator companies are losing income applies to only one tenth of consumers, or less.
“Modern mobile phones allow internet connection which means that consumers can text or talk via the internet and not use a mobile operator,” said Sandro Asatiani, Social Media Expert. “If a consumer uses mobile internet of the same mobile operator he/she is still paying for this service, but paying much less as the internet costs less than calling. There is another option as well, for example using Wi-Fi which is free and is available almost everywhere in Tbilisi. Then a person pays no one, just uses free internet and can communicate with everybody via that. Mobile phones are multifunctional devices that can access the internet and this is where the problems start with mobile operators. Such services are gaining popularity in Georgia step by step. Still, few people know that they can talk free of charge or at least cheaper. I personally use Skype for calling and Google Talk for messaging. Such applications will reduce the incomes of mobile operators in terms of sending SMSs as well as talking on mobile phones,” he said.
“Free SMS applications are not an innovation on the market,” said Giga Paichadze, blogger and expert. “It has been almost a decade since BlackBerry first introduced such an application; BlackBerry Messenger allows customers to send messages without using cellular communications. In the last two years Apple realized the new service iMessage which is an application with the same possibilities. Other mobile phone companies have the same offers as well. Besides free messages this applications also allows one to call free of charge. Such applications are WhatsApp, Viber and of course Skype, which has moved from desktops to mobile phones and offers the same possibilities. This means that the consumer does not pay 6 Tetri for texting or 28 Tetri for calling,” he added.
“As the above-mentioned applications require internet for their use, consumers have to buy mobile internet. This is provided by mobile operators, from which a consumer buys an internet package to have constant access to the internet. As for Wi-Fi, it is not accessible everywhere. In most cases it has a stationary nature – it is mostly available at homes, offices, restaurants and bars. That is why consumers tend to buy mobile internet. Today’s statistics do not provide the exact numbers, but growth tendencies show that out of 5 billion mobile phone owners only a million has the internet. Among them about 30 percent is smartphones. We should also include tablets, computers and cell phone hybrids, which have the same applications,” Paichadze said.
Free message apps will cost telecoms too much worldwide, which has been proved by several researches. Global telecom operators are expected to have lost USD 23 billion in SMS revenues by the end of 2012 as smartphone users shift to free messaging applications, according to an industry report.
Technology Research Company Ovum forecast that the cumulative losses would reach USD 54 billion by the end of 2016 as the traditional Short Messaging Service (SMS) gives way to Internet-based platforms such as WhatsApp.
The number of mobile network subscribers reached 4,430,613 in 2011, which is 11.3 percent more than in 2010 (450,341 subscribers), according to the annual revenue of the Georgian National Communication Commission. Geocell’s share on the market consisted of 41.7%, Magticom’s – 37.9%, and Mobitel’s – 20.4%. As for Silknet, it started operating in 2011 and accumulated 1,782 subscribers by the end of the year.
Mobile operators retail revenue reached GEL 441 million in 2011. Voice service consisted of 73.1 percent of revenue, SMS – 8.8%, internet – 3.6% and other additional service -14.5%.
About 69 percent of subscribers used SMS services in 2011. In total 3.7 billion SMSs were sent in 2011 and 3.3 in 2010. Customers’ interest in internet service increased in 2011. Their number increased from 800,000 (in 2010) to 1.2 million (in 2011).
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