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[December 20, 2012]
Lack of words for texting as WhatsApp and Viber take over [National, The (United Arab Emirates)]
(National, The (United Arab Emirates) Via Acquire Media NewsEdge) People wait to cast their votes in Freetown, Sierra Leone. The story of the country's elections was covered by a group of newly trained citizen journalists posting updates by SMS. Issouf Sanogo / AFP Triska Hamid This month the humble short messaging service (SMS) celebrated its 20th birthday.
On December 3, 1992, Matti Makkonen, an engineer who helped to develop the technology, sent just two words, "Merry Christmas", from a PC to a mobile phone on Vodafone's network in the United Kingdom.
Since then, the service developed from those two little words to become one of the most convenient and popular methods of communication all over the world and has proven to be a significant revenue stream for mobile operators.
Last year, global SMS traffic increased to 7.4 trillion messages, a 44 per cent increase from the previous year when 5.2 trillion messages were sent. Informa is forecasting that SMS traffic will reach 9.4tn messages in 2016 to generate US$127billion (Dh466.50bn) in revenues.
According to Pyramid Research, SMS revenue in Africa and the Middle East is set to reach $12bn next year. But whether SMS is likely to last another 20 years is questionable. The service is at risk of depletion with the popularity of internet-based instant messaging (IM) tools and applications.
It took several years before SMS took off among mobile users, but it has since become a fixture and an expected service with every handset. From alerts on financial transactions to sending annoying spam, SMS continues to be a simple and effective way to communicate.
Last month, Sierra Leone went to the polls. The story of the elections was covered by a group of newly trained citizen journalists posting updates by SMS, most using basic "green screen" Nokia mobile phones, according to Journalism.co.uk. Those text reports, giving details such as the number of people waiting at a polling station, quotes from voters and descriptions such as "no electricity at Femi Turner station Godrich as it is an unfinished building, NEC agents using lamps to count", were sent for the price of a local text and received to a Gmail account in London, from where they were verified, curated and manually posted to Twitter.
The reporters, many of whom were in areas of Sierra Leone with no electricity or access to computers, were able to share reports with those online.
One citizen journalist, who had both arms cut off at the elbow during the civil war that ended in 2002, was able to use a pincer mechanism built on the end of his arm by doctors to text and therefore to report.
This was the first project by Radar, which trains citizen reporters and encourages offline communities to connect with the online world.
"Our model is that we are giving people the skills to send micro-reports by SMS that will then be uploaded on to Twitter, Tumblr and news blogs, on their behalf," the Radar founder, Libby Powell, a freelance journalist with a background in development, told Journalism.co.uk.
Her plan is to take the Radar citizen journalism training to the country where she first saw the value in mobile phone reports: Sri Lanka. During a visit to the country this year she "realised quite how integral mobile phone footage had been during the civil war, and the role that very grainy but crucial footage would play as and when there is a tribunal".
The majority of the UK's Channel 4 documentary Sri Lanka's Killing Fields, which covered atrocities during the civil war, was shot on mobile phones. And the short message service is proving increasingly popular as technology becomes cheaper and more widely available.
"Our research shows that SMS traffic worldwide is still growing and we expect there to be further growth," says Matthew Reed, the principal analyst at Informa Telecoms an Media. "But it is a mixed picture as SMS is declining in some markets." Competition from services such as WhatsApp and Viber, which are often referred to as over-the-top (OTT) players are playing a major role in SMS' decline. These internet-based instant messaging systems have begun to cut into revenues. Ross Cormack, the chief executive of Oman's Nawras Telecom, recently announced that the company faced a 60 per cent drop in its SMS revenues in the first nine months of the year as a direct result of WhatsApp. The operator is now working with Whatsapp to provide bundles and packages for the service in a bid to monetise the app for itself.
Nawras is not alone. Bahrain's Batelco has suffered losses of about 50 per cent in its SMS revenue.
"I would not blame it on Whatsapp only, it is all these social media tools," says Rashid Abdulla, the chief executive of Batelco Bahrain. "They are more convenient, part of the social networks, a lot of facilities are built in to them, they are colourful and user friendly. They have forced the traditional SMS to go down and so all the operators have suffered as a result." Morocco is one of the few countries that publishes SMS statistics regularly. While there are fluctuations, the overall trend is a positive one for SMS in the country and this is a trend that is reflected in North Africa generally. In the third quarter of this year, more than 1.88 billion SMS were sent in Morocco alone, compared with 1.49 billion in the same quarter last year.
However, the GCC markets, with their relatively high smartphone penetration rates in comparison have not faired so well. "The GCC markets do have some of the characteristics of markets where SMS tends to be under threat - there is strong take-up of smartphones in the GCC so people can access OTT services," says Mr Reed. "And arguably operators have not been successful at implementing pricing and uses for SMS that allow it to remain relevant." While phones without internet capabilities and mobile apps continue to depend heavily on SMS, this is not the case with smartphones and feature phones. The percentage of smartphone penetration in the UAE is close to 50 per cent.
"SMS will still be around for another six to seven years but we're seeing the IM world is overtaking very quickly and that is an area where we also have to establish our presence," says Samer Geissah, the head of innovation at du.
Mr Geissah says users are now communicating via WhatsApp, Facebook and Twitter where they traditionally sent SMS to one another, especially during Eid, Ramadan and New Year.
"We are not experiencing that big drop in SMS, but we are seeing a decrease especially during events when we used to see SMS in hundreds of messages per second," he says. "We are still seeing it in the hundreds, but not in the same threshold." Du is keen to establish its presence in the IM space and the company is drawing up a strategy to tackle the dwindling SMS revenues. "We have to establish ourselves in this domain, and cannot sit there and watch our revenues go away. Perhaps we can combine IM and SMS together," said Mr Geissah.
It remains to be seen which is the best option for operators - whether to establish their own IM apps and services or try to work alongside the OTT and IM operators.
"Overall the future remains bright for SMS, if only because it will be several years before OTT messaging applications can achieve the same level of penetration as SMS," says Pamela Clark-Dickson, a senior analyst for mobile content and applications at Informa.
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