Alert: Social Media Is Eating Into Carrier Revenues, And It?s Only Getting Worse
Twitter, Facebook and other social networks have long counted on the rise in smartphone usage to help fuel their growth: that trend, however, seems to also be taking a toll on mobile carriers ? specifically in the form of revenues.
The analyst firm of Ovum, part of the Informa Group, has estimated that operators lost $13.9 billion in SMS revenue in 2011, as a result of their customers using services like Twitter and Facebook to message each other instead of the carriers? own text messaging services. A separate report from mobile analytics firm Bytemobile has also charted huge growth in the use of social media on mobile ? with operators getting virtually no benefit as a result.
Bytemobile, using data it gathers from its tier-one carrier customers, found that the average mobile user spends around nine minutes per day each on Facebook and YouTube on mobile. YouTube, being a video service, generates 300 times more traffic on data networks. In both of those cases, it notes, neither service generates any mobile operator revenue.
There is a caveat, of course: carriers are still making money from people using their phones to use social networks: users are, after all, still buying 3G and 4G data plans; and many (but not all) carriers also roll public WiFi connectivity into those plans.
It?s questionable, though, whether that incremental data revenue for tweets, status updates and check-ins, and the more substantial data usage from services like YouTube, are able to offset the loss from the more lucrative messaging services that operators built up and still count on for revenues.
It appears that the figure is gradually growing: Ovum points out that a $13.9 billion loss works out to some nine percent of messaging revenues for carriers worldwide, a rise from the six percent of revenues lost in messaging revenue to social messaging in 2010, when carriers lost $8.7 billion in SMS revenues to social media messaging.
Ovum?s suggestion? For carriers to work more closely on making their messaging and other services more