The king is dead. Long live the king.

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More evidence today of the rapid changes happening in mobile messaging that are in turn fueling our business. We have previously seen data from the Philipines and the Netherlands that SMS volumes were dropping, and Forbes today reported that the same is true in 3 other advanced mobile markets:

Finland. Home of Nokia, the HDmessaging development team and traditionally an early adopting market in mobile saw a 22% drop in SMS volumes year on year (Christmas Eve volume on Sonera, the country’s biggest operator).

Hong Kong. Another mature mobile market saw a 14% drop in volume from Christmas day 2010 to 2011

Australia. Similarly, Telstra experienced a 9% year-on-year SMS decline over the whole of 2011.

So is mobile messaging dead? No, consumers are just moving to services with better features and lower prices that use a data connection not SMS to send messages. Indeed there is plenty of evidence that mobile messaging volumes continue to rise, which just accentuates the fall in SMS volumes. What is interesting from today’s data is just how fast this is happening.

The challenge for mobile operators is what to do about this. SMS has traditionally accounted for 20%+ of profits – one major global operator recently described it to us as “second only to prostitution” in profitability. In addition to a loss of profits, having consumers move to third party solutions for messaging means a loss of a relationship (carriers have already lost the app-store battle to Apple and Google). Do operators accept that they are ‘dumb pipes’ and turn into the ISPs of mobile, or do they launch their own IP based messaging solutions?

We strongly believe that operators must provide best of breed solutions for their consumers, or expect to see more erosion of profits and loyaly. HDmessaging is working with operators around the globe to provide white label IP messaging solutions.