Mobile operators warned that free messaging apps will continue to grow

Mobile operators have been warned they face losing billions in revenue unless they can compete with free messaging services such as WhatsApp.

Application services such as Facebook messenger and Blackberry messenger that allow smartphone users to send free messages have surged in recent years.

But it has led to mobile operators losing billions of dollars from the charges they impose on SMS and text messages.

A leading Application messaging specialist has now warned that firms face more difficulties with the application messaging market poised for huge growth in the coming years.

Perry Offer, CEO of the Dialogue Group, told the Wholesale Messaging and SMS World event in London that operators must evaluate their profit structures and take action for continued profits and growth.

He said: ‘Now is the time for operators to act. I’d like to invite the CEO’s of the world’s operators to sit down with their CFOs, and a flipchart, to map out the relationships between their differing revenue flows, because in that way they would understand that much of their current ‘success’ is being delivered at a huge price.

‘The industry needs to work together as a whole to address this… by understanding that it’s within our power to do something about it. This said, operators must not kill the goose that laid the golden egg by setting the price too high and decimating the volume.

‘As long as these… routes are available then there will always be a price point pressure so we need to work together to put the market in order.

‘Operators should work more closely alongside aggregators in order to bring down price points and by moving to 100% on-net delivery the true value of SMS can be reached. The value of the channel is centred on fast and reliable delivery.

‘This is particularly true for mission critical, high-value, time sensitive information in an age of increasing concern about security and authentication.’

Offer joined the event’s keynote discussion panel, which focussed on wholesale SMS and messaging technologies, services, markets and legislation, and coincides with the 22nd Anniversary since the sending of the first SMS message.

The panel included James Lasbrey, Head of Wholesale Messaging, Telefónica, who confirmed that the industry will witness a huge surge over the next three years in A2P SMS traffic volumes and revenues, particularly in core markets, including Latin America and Europe.

The panel went on to discuss the pricing pressure challenge, a direct result of grey route trafficking which destroys significant revenues that should rightfully flow to the operators. In order to address this issue and eradicate rock bottom pricing, Offer urged operators to move away from encouraging SIM farms and tackle disorderly markets and fraudulent activity head on, something which was echoed by Lasbrey.

Dialogue Group is the world’s longest established international A2P SMS messaging company with headquartered in Sheffield and offices in London, Sydney, Cape Town and Singapore.