Competition between SMS and social message applications

Research Topic:

Text messaging, also known as Short Message Service (SMS), is a important profitable service to mobile service providers, which contribute about 20% revenue of mobile service providers's total revenue. However, SMS faces huge challenge to the social messaging applications on smartphone and social networking services, such as: WhatsApp, LINE, Facebook, Twitter, etc.

Last month, OVUM released a report, which forecasted that social message applications would make mobile operators losing the revenue about US$54 billion by 2016.

The different pricing types between text messaging and social message application could be one of the main reasons why social message applications grow up so quickly. Traditional text messaging was charged by usage, although there are some wireless operators have provided unlimited text messaging services with a flat monthly rate, however, consumers only have to buy the applications (sometimes consumer can even download the applications freely), than use the social message services on smartphone without paying any fee.

To consumer, social messaging application could be a more economic choice, however, in some countries, mobile operators were highly regulated by government, especially the pricing. For instance, all of the rate plans of mobile operators have to get the permission from NCC (National Communications Commission) in Taiwan, and once a service were reduced the price will never be permitted to raise the price again. However, the regulators cannot regulate the applications providers which might lead to an unfair competition environment.

Research Questions:

How to create a fair competition environment by regulations between mobile operators and applications providers? Should regulators dismiss from the pricing regulation? What is most benefit to consumer? How do the mobile operators deal with the challenges from application providers?

What kind of data I need?

• SMS usage and revenue statistics in five years.
• The changes of mobile operators revenue combination.
• The performance of social messaging application companies.
• The pricing regulations of mobile operators in main countries.

What’s the storyline

1. The emergence of social messaging applications.
2. The decreased of short message services.
3. The correlation between social messaging applications and short message services.
4. How to make a fair competition environment which can benefit the consumer, operators and industries.