Text messaging could make U.S. gains

Oct 27, 2005

The United States has lagged behind Europe and Japan when it comes to text-messaging from cell phones, but that gap is closing rapidly, according to a recent report.

In its study on U.S. mobile market trends, the Cambridge-based private British research group Analysys, which focuses on telecommunications issues, found that mobile messaging in the United States rose by 106 percent in 2004 and will continue to grow steadily over the next five years.

Granted, the U.S. text-messaging market accounted for only 4.8 percent of mobile carriers' revenue, compared to nearly 16 percent in Western Europe and a whopping 22 percent in Japan.

That, however, should change as mobile data revenue will make up about 10 percent, or over $16 billion, of operators' total mobile-service revenue, especially as providers are putting more effort into marketing text-messaging products that are attractive to users, according to Analysys.

"U.S. operators have introduced large bundles of various types of messaging services, which can be very attractive to customers," said Alex Zadvorny, a principal author of the report. "For a flat monthly fee, a subscriber can now sign up for a messaging bundle and send any combination of text, instant, picture, and video messages. ... Such bundles have the potential to significantly increase usage and revenue from messaging, and could be implemented by operators in other markets," he added.

At the same time, Zadvorny, who is a senior analyst with the group specializing in European mobile markets, acknowledged that U.S. subscribers have been slower to take up text messaging given that e-mail plays a more prominent role in the United States. In addition, the cheap cost of making cell-phone calls has given less incentive for U.S. mobile-phone users to use text messaging, given that there is little money saved from text messaging a person as opposed to actually calling him on his mobile phone. Nevertheless, operators are beginning to step up efforts to bolster services and devices that would cater more to the mobile e-mail market, he said.

Still, it is not simply in text messaging and other mobile data functions that the United States lags behind other industrialized countries. Analysys pointed out that with 61 percent of the population having cell phones in the United States, the country is lagging compared to other nations. The group continued to state that market penetration would saturate at around 80 percent, in light of the fact that U.S. subscribers tend not to own more than one handset or one prepaid mobile phones.

As for the prepaid cellular market, the group said that U.S. operators are beginning to put more emphasis on that particular service, especially as prepaid subscribers accounted for 36 percent of accounts in the first quarter of 2005, compared to 16 percent a year ago.

In order to encourage users to take up mobile data transfer more, Analysys recommended that providers offer more flat-rate messaging packages and boost prepaid phone services that included text messaging in that service.

Copyright 2005 by United Press International

Explore further: Apple a decade behind Japan mobile payment curve

add to favorites email to friend print save as pdf

Related Stories

Snapchat valued at $10 bln

Aug 27, 2014

US media on Tuesday reported that Snapchat was valued at $10 billion based on funding pumped into the startup by a powerhouse Silicon Valley venture capital firm.

Could "narbs" help you tell your social media story?

Aug 18, 2014

Ananda Mitra of the Department of Communication, at Wake Forest University, Winston-Salem, North Carolina and colleague Sanjay Mamani point out that there are increasing amounts of unstructured data permeating the internet ...

So you think you can delete? AVAST knows better

Jul 09, 2014

Nice. You have decided to give your old Android phone a second life more noble than the junkheap and so you delete all your files and wish the phone well with its new owners. Reality alert. Read the new AVAST ...

Recommended for you

Samsung accuses LG execs of damaging its products

2 hours ago

Samsung Electronics Co. has accused senior executives from rival LG Electronics Inc. of vandalizing its washing machines at stores in Germany earlier this month and has asked for an official investigation.

A spray-on light show on four wheels: Darkside Scientific

13 hours ago

Darkside Scientific recently drew a lot of gazes its way in its video release of a car treated to the company's electroluminescent paint called LumiLor. Electroluminescence (EL) is a characteristic of a material ...

Apple a decade behind Japan mobile payment curve

21 hours ago

Apple's proud announcement that its new iPhone could be used to buy goods in a single swipe left customers non-plussed in Japan, where mobile contactless payments have been normal fare for a decade.

User comments : 0