Somebody asked me this question immediately the news hit the streets and I can only once again slant it as a business decision. The reason or rationale behind it may not be too far to seek. Let’s look at what that might be.
First it is no secret that over the decade, particularly in the last few years, the birth and popularity of various chat and instant messaging apps -I can name a few- Whatsapp, Facebook messenger, 2Go, Blackberry messenger, Snapchat, Viber and social platforms-Instagram, Facebook has greatly disrupted the global telecommunications SMS space.
In fact according to a now dated Informa report “almost 19 billion messages were sent per day on chat apps in 2012, compared with 17.6 billion SMS texts”. Further, according to research firm Ovum, “more than $23bn (£15bn) of SMS revenue was lost in 2012 due to popularity of chat apps”.
To further buttress the point the estimate was made that by 2014, up to 50 billion messages would be sent using these apps compared with just over 21 billion using the traditional SMSs. Fast forward two years to the present and if you the readers daily usage of any or all of these apps is anything to go by, then it’s safe to say that the gap has and will only continue to rapidly grow in the future.
For now though, the Telecoms companies may have a little respite- First obviously while it might be said that virtually nobody uses a “dumb phone” (a phone that can only call or text) as their main phone any more, not everyone particularly in the developing nations of the world has a Smart phone. Indeed many use a feature brands. And indeed, though it is admitted that by definition these (feature) phones are data enabled, support for chat apps on them vary. As such a number of people still depend on the traditional means of messaging-namely SMS.
Again for certain types of functions; weddings, luncheons and broadcasts specified to reach a large or specific audience - SMS marketing, vacancy updates, candidacy notifications, alerts, etc, SMS clearly still remains the more reasonable option. That said, even this though can also be expected to change within the decade. According to statistics global Smart phone ownership stands at 2 billion and 82 million and is projected to grow to approximately 2 billion 660 million by 2019 (Statista.com).
Secondly and as luck would have it for telecoms companies, by dint of the very nature of the internet’s infrastructure a down ward or diminishing trend in one of its core business –SMS, has seen a more than proportional up-tick in the other- data services.
And yet, though this has served to mollify the average telecoms exec, it has by no means resulted in their urge to let the SMS segment die a natural death. Let’s face it, SMS as belated as it may sound in today’s fast paced social media connected world, still has its place and relevancy.
Case in point. Recently the HR arm of the company a friend of mine works for went on a recruiting drive. In the aftermath of application submission, screening, interviews and what not, there then remained the means by which to communicate with the successful candidates. The medium that was opted for was SMS rather than the ubiquitous Whatsapp or Snapchat. How come? Was it that these latter platforms would have been too unwieldy for the HR resource personnel, or that it just wasn’t as accepted as the traditional SMS when it came to such notifications? The answer to that question is…partly Yes.
Let’s face it, it may not be appropriate to add names of yet to be employed individuals to a company’s official Whatapp channel/group, particularly when that channel may equally be the medium for communicating their applications failure. That said the reverse argument could just as easily be made- that Whatsapp, or any other popular chat app can be a veritable tool for business be that business- communication internal or external.
If that is so, the challenge then is not that, instant messaging platforms like these cannot more substantially take the place of the traditional SMS notifications, but that other companies –well as far as I know, at least those in Nigeria have been rather slow on the uptake.
Another fault too lies with the owners of the platforms themselves. In most offices, many companies have already opted for and executed Gmail as a company wide email client.
There is no reason why a Whatsapp for Business or Snap chat spin off aimed at the business community cannot be actively promoted and canvassed by the respective owners of these platforms.
And so here is where companies like Facebook need to sit up and smell the coffee, for whilst the young behemoth has its hands filled and attention taken up by various enterprises-‘Rift and the controversial Internet.org, somewhere, someplace in the dormitories and garages of some middling Chinese, Israeli, or African university campus or tech-hub, a young Spartan conspires the throne. Be thou not bemused. If Facebook can do it to MySpace and Ford motors do it to the horse and carriage, there is no doubt another Young Turk can do it to the Sultans guards if not perhaps to the Sultan himself.
In that light, companies like Whatsapp, Snappchat and their contemporaries need to sit up and start seeing these platforms as more than just another way for individuals to socially connect.
Have I digressed? - my apologies for that. But to come full circle, to SMS, so yes then, there is a threat. A threat many a player in the mobile telecoms industry are not unaware of. If however the threat posed by these socially geared apps to the traditional SMS service is not total, it by no means needs a siddon look approach. The Telecoms companies are not reticent and are by no means ready to lose a still important contributor to their revenue mix.
Apart from the regular SMS form, most of these companies also offer Bulk sms as a product. After the disruptive impact of chat application on the medium, why then further degrade the revenue potential of this segment by allowing people send SMS whether in bulk form or not, at no cost, free and unfettered from their StartPack or Betatalk bonuses? In other words to invariably send bulk SMS without having first purchased it. This then is probably the reason why a cap has been placed on these bonuses.
Faced with the pressures exerted on SMS by the rise of messaging apps, MTN as a telecoms concern and as might be expected, is only trying to avoid further shooting itself and its revenues in the foot. To do this, it had to adjust the hitherto blanket check it gave customers to send SMS free of charge. The limitation thereby introduced will ensure a situation whereby although neither side can be said to be clear winners, at the same time neither side can complain total loss.
The real challenge however for the Telecoms companies is how to keep stimulating interest or usage of the SMS technology either through innovative products or services, since after all, the average messaging app can do virtually everything and more that sms does.
One way to do that has been to bundle it into other products. However this creates a limited incentive to use SMS since most people prefer chat apps anyway.
Another way would be to introduce special promos with a prize incentive- say Lotteries and interactive contests. The danger of this though is that, it pans away from the services (SMS) traditional use and runs the risk of devolving into just another lottery-like aid.
The third and more viable option would be to target corporate organizations and institutions public and private that have the need to communicate with their clients or wards at a periodic or regular basis. For example JAMB, NECO, WAEC, NABTEB, Local government employees, professional institutions like ICAN; financial institutions, etc.
For example for the millions of customers who receive bank alerts nationwide, a smart telecoms company can target these to join their network, by partnering with their institutions to offer these customers up to 50% discount on their bank alert costs.
Another way to boost the SMS segment with these organizations and institutions in mind would be to enable the customers of these institutions more transactions via SMS or probably USSD. For example there is no reason why I should not be able to get my utilities bill- electricity, water via SMS.
And yet inspite of all this, taking a long view of the future of SMS, it might be surmised that although the service may not go the way of the Dodo, the trend will be to see its market share continually whittled until finally it becomes a niche concern- something reserved for general communications by individual legal persons.
Until then however, whilst the sun still shines, let the concerned players squeeze all the fat they can from the sector. As for MTN, the cap placed on SMS usage from the Betatalk and StartPack bonus accounts is obviously a tactical business move-the natural corollary to an intellectual cue.