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According to a new report from Pyramid Research “Mobile Messaging Trends in Latin America” revenues from services such as SMS, MMS and other messaging technologies will exhibit robust growth over the next five years. See Exhibit 1. While adoption of such services have been impeded by issues such as network interoperability, low penetration of data enabled handsets, lack of content and high tariffs, operators in the region have made significant progress in breaking down these barriers. The results of this progress are undeniable to the industry as the percentage of revenue coming from mobile data surpasses double digits on a regional level, with markets such as Venezuela and Argentina leading the charge.
Exhibit 1: Latin America’s Mobile Messaging Revenues (2004-2009)
Source: Pyramid Research.
The extent of this progress is heavily fragmented across countries and among operators, however, and challenges remain. Report author Marc Einstein added “While operators in most large markets have SMS interconnection, there are currently no similar MMS agreements. Operators must strive to achieve such accords if they want the service to become anything more than a novelty to a select group of users.” Pricing will also be a major sticking point going forward as Einstein added “the rest of the region could learn lessons from the Venezuelan market, as applications such as peak and off-peak SMS pricing and all-you-can-eat messaging plans have enabled operators to realize the full potential of these services.”
The big winners of Latin America’s mobile messaging boom will be the operators, as both messaging and non-messaging wireless data applications are embraced by a wide user base. As revenues from messaging services such as SMS and MMS surge, they will also serve as a counterweight in combating decreasing mobile voice tariffs. Indeed, Pyramid expects mobile voice ARPS to fall by 16% to US$10.13 from US$12.11 between 2004 and 2009, while data APRS will increase 143% from US$.84 to $2.04 over the same period. Operators, however, will not be the only ones who stand to gain from the messaging boom. Infrastructure vendors and content providers will also benefit in the region as increased usage of basic services drives demand for more sophisticated applications.
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