Telecom firms in Nigeria are gradually losing Short Messaging Service (SMS) revenues to the increasing adoption of various instant messages apps and platforms available to telecoms subscribers on their mobile devices.
Findings showed that with the increase in the use of BBM, WhatApps, Facebook Chat, which are provided for free since only cost of accessing Internet is needed by the subscribers to access all these chat platforms, the potential over N7.3 billion annual revenue to the operators is threatened.
Adebayo Bolaji, a postgraduate student of University Ibadan, Oyo State said his daily cost of sending SMS on his mobile network has reduced drastically since he got his Blackberry device, which offers him access to Blackberry Messenger, BBM, a chat platform designed on Blackberry devices.
Bolaji's experience is no different from that of many other mobile phone users who do not have a blackberry device but have access to other message apps like WhatsApp, Facebook chat via phones like Nokia and other smart phones.
According to an internet expert, Mr. Ope Odusan, the revolution being created by instant messaging apps is global, stressing that their ‘free status’ makes it fashionable to most phone users, instead of SMS, which cost them more per unit sent.
President, Nigerian Internet Group, Mr. Bayo Banjo, said telecoms networks would need to face the reality in the current trend, stressing those mobile network operators will have to face the challenge by converting the dwindling SMS revenue into a broadband revenue opportunity.
The Nigerian Communications Commission had, in January, slashed off-net SMS tariff FROM N10 to N4 and On-net tariff is not expected to go above N4 also.
Currently, smartphones and mobile Internet may not have dominated the Nigerian mobile space, as there are still people who rely on text messages to communicate but analysts say this trend could change depending on broadband Internet penetration in the country, which will create further dent in SMS revenue to the operators.
According to Mr. Lanre Ajayi, President of National Association of telecoms Operators of Nigeria, not only will the operators be losing revenue from SMS, they may also be losing from voice revenue through apps such as Skype, which offers free voice calls to telecoms consumers.
“So, with Voice over Internet protocol, VoIP, gaining awareness, we may even get to a time in future when people will be using VoIP to make calls, once they are connected to the Internet, but this is still futuristic,” Ajayi said.