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Basic SMS text messaging will be key revenue driver for mobile operators in Middle East and Africa
Source: BI-ME , Author: BI-ME staff
Posted: Tue March 17, 2009 7:17 pm
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INTERNATIONAL. Basic SMS text messaging will be a key revenue driver for mobile network operators in the Middle East and Africa over the next five years, helping to offset continuing declines in average revenue per subscriber (ARPS) for mobile voice services in the regions, according to Pyramid Research, the telecom research arm of the Light Reading Communications Network

A new report 'Leveraging SMS to Attract the Low End of the Income Scale' examines how operators in the region can leverage the SMS platform to boost revenue from the largest, lowest-income subscriber segments.

The 14-page report, part of Pyramid's new Africa & Middle East Telecom Insider report series, examines peer-to-peer SMS in the region, a service that accounted for about 60% of total mobile data revenue in MEA in 2008, and will continue to be the largest single contributor to data revenue over the forecast period. It also analyses some of the latest and most successful SMS-based services, examining in detail how operators have implemented four of these services in three key markets: South Africa, Egypt, and the UAE.

The fast subscriber growth that operators in  Middle East and Africa are witnessing – a 39% annual CAGR over the past four years and about an 8% annual CAGR over the next four years – poses some serious challenges related to network efficiency and declining ARPS, notes Badii Kechiche, Analyst at Pyramid Research and author of the report.

"Mobile voice ARPS has been declining at a rate of more than 10.5% annually over the past four years because of increasing competition and an expanding base of lower-income subscribers, pushing operators to focus on data services in order to translate subscriber growth into revenue growth," he says.

In Africa and the Middle East, SMS revenue is expected to almost double to nearly US$12 billion in 2013, far exceeding the revenues of higher-end data services such as MMS or mobile broadband, says Kechiche.

"The significance of this development goes beyond the revenue opportunity coming directly from peer-to-peer SMS," he notes.

"Several operators have found ways to capitalise on subscribers' new familiarity with SMS to increase not only their data ARPS, but their voice ARPS, too. The growing popularity of SMS within the region will allow operators to use SMS-based value-added services, sometimes in conjunction with instant-message USSD services, to boost voice ARPS among the mass base of lower-income subscribers."

The report 'Leveraging SMS to Attract the Low End of the Income Scale' is priced at US$595 and can be purchased online at www.pyr.com 

See also www.lightreading.com

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