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Are Smart Phones a Threat to Nigeria’s N180 billion SMS Industry?

By on September 13, 2012

SMS

Telecoms companies in the country earned N180 billion from Short Message Service (SMS) sent by Nigerians in 2011.  That figure is expected to increase in 2012 as research carried out by London based Ovum Technology, an international research and development company showed a 33% growth in the quantum of spending in 2010 (N135 billion) and by 73% year-on-year in 2009 (N78 billion).

Etisalat CEO told journalists that Telecoms companies across the world gross $150 billion annually from SMS. Nigerian telco’s earnings represent a small fraction of the global earnings. However with strategic focus on the profit center, those earnings could continue to showcase growth spurts. Especially as SMS revenue is perpetually threatened by smart phones.
Smart phones pose a clear and present danger to SMS revenues, because smart phones have applications that allow data subscribers to increasingly bypass the need to SMS for a fee.

He said: “Over the last few years, telecoms industry has recorded six billion mobile phone users, while over 100 million users have been recorded in Nigeria. The over 100 million users are fantastic for the industry. Nigeria is now about the 10th in the world table of mobile subscribers. We are regarding mobile phone as the single most used devices globally.”

“7.8 trillion Text messages were sent in 2011 and SMS traffic is expected to reach 9.6trillion in 2012. By 2013, the SMS revenue is forecast to break the $150 billion mark for the first time, and it will continue to grow for the next two years.”

Nigerian telecoms companies will continue to experience an increase in SMS revenue and are advised to improve their product offerings so smart phone users do not abandon the service altogether.
It is important for telecoms companies to partner with innovative companies that can provide cutting edge solutions for branding that increases SMS revenue . Innovation should also be encouraged from within the rank and file of the staff strength.

All business development channels should be explored as the fortune at the bottom of the pyramid oftentimes takes patient digging to be had.