Why Over The Top Messaging Is Mobile's Newest Monetization Platform (opens in new tab)

Text messaging. Remember that? Of course you do. You probably text people on a regular basis. Mobile Network Operators (MNOs) have benefited from this asynchronous form of short messaging for years and have collected hefty revenues from it as well. In fact, Portio Research estimates SMS revenues will top $150 Billion this year alone. But MNOs aren't they only ones benefiting. Texting has led to all types of uses beyond just communicating with another person; it has led to branded campaigns, voting and of course spam.

However, as MNOs start to enter the third phase of the sigmoid or S-curve growth model as service providers, SMS in many markets is starting to enter the detrimental "substitution" stage of decline where users are finding new, better and cheaper alternatives to SMS, namely Over The Top (OTT) messaging providers such as Whatsapp, Kik, Snapchat and even Facebook Messenger along with a seemingly endless array of other OTT apps. According to McKinsey, users in South Korea and The Netherlands have already tipped away from SMS where the move to OTT messaging apps is having a material impact on the MNOs SMS volumes and revenues. Essentially, people are texting so much less that it is impacting the MNOs' business.