The Short Message Service (SMS) enables people to easily send and receive text messages with their mobile phones. This new form of communication has been enthusiastically embraced throughout Europe, Asia and other parts of the world. SMS is commonly referred to as 2-way text messaging in the U.S.

“Texting” has quickly evolved into a popular way for people to communicate with one another. Users send messages in plain English by typing into their mobile phone keypad. Users are not required to navigate through complex menus or multiple screens. SMS interactivity and ease of use open up valuable opportunities for applications such as mobile commerce, entertainment and content.

The key data related fact about mobile telephony is the unexpected and extraordinary explosion of SMS messaging. Figures indicate that the number of SMS messages now being sent world-wide is above 10 billion per month. This is an astonishing figure given that it approximates to 2 messages per month to every person on the planet. Of course that doesn't give a clear picture of what is going on. What appears to be happening is that young mobile phone users, in the age range 15 to 25, are using SMS capability extensively sending each other messages at a rate of over 10 per day.

High-Growth Market

SMS has experienced explosive growth in Europe and Asia:



Such is the massive demand for SMS globally that the GSM Association's, a wireless and cell-phone organization envious forecast of 10 Billion messages a month by end 2000 was achieved during September - three months earlier than predicted. The Association has now revised its year-end forecast for December to 15 Billion messages per month.

According to the GSM Association, text messages sent across the world hit a staggering 50 billion in Q1 this year. This represents an impressive rise. During the same period in 1999 there were only 3 billion text messages sent, Q1 2000 saw around 10 billion, and now there's five times that figure being sent across more than 500 million global GSM users.

Unique Opportunities in India

The Indian Cellular Market is entering a boom period after years of quasi-stagnation. Gartner estimates that by 2005, cellular subscribers in the country will number 30.9 million, up form 6.4 million at the end of March 2002. By then, India will be the fastest growing cellular market in Asia Pacific (in 2000, it was the Philippines and China) with 36 percent growth over the previous year.

Mobile operators will provide an estimated 45 per cent of additional telephone connections during the year. Cellular susbcribers are expected to grow 80 per cent by the end of financial year 2003 to touch 1.15 crore, up from 64 lakh subscribers in fiscal 2002, according to an ICRA report on telecom industry.

This would mean that cellular telephones would account for 20.5 per cent of the total telephone connections in India compared to 14.4 per cent last year. However, the cellular density would still remain a low 1.1 per cent comapred to the fixed teledensity of 4.3 per cent. However, the report points out that, growth in cellular telephony could vastly exceed these projections, if the system of calling party pays is implemented.

Just for the record, new cellular connections comprised 34 per cent of all telephone connections last fiscal and 22 per cent during fiscal 2001.

Doing some more crystal ball gazing, the ICRA report points out that the cellular subscriber figure is expected to touch three crore by 2005. At the same time, the fixed line network is expected to expand to about six crore by 2005 from 3.84 crore lines by 2002.Revenue growth, however, will lag the growth in susbcriptions.

Indian Cellular Operators are just beginning to market text-messaging. A recent Outdoor ad campaign from Orange features the benefits of SMS, Movies like Pearl Harbour are promoted via SMS based contest, BPL is pushing SMS via Mnews which are in tie up with Mid-day, SMS Chats with Film stars and SMS Mobile dating and even mobile phone manufacturers like Nokia and young people at loud rock concerts and noisy parties messaging each other via their cell phones.

Delhi-based Essar Cellphones unleashed a 45-day-long ad campaign, spending a whopping Rs 2 crore. The "r u smsing" target group is the youth, so the company's adopted the fun platform: the lingo is whacky and full of one-liners like "c u 2nite" and "gd 4 u".

The SMS segment is where the industry's first real marketing initiatives are being taken. Tariffs here are standardised across all service operators. There's no scope for another price war. So companies are looking at extensive consumer education among their subscribers to get them hooked on. This, they believe, will pull up their revenues and have a positive rub-off on their mother brands as well.

With more content, graphics and multimedia, bigger and better terminal displays, enhancements to security and appropriate privacy, use of SMS is expected to accelerate to even greater levels.