BBM On Iphones Threatens Telcos N9.75bn SMS Revenue

The availability of BlackBerry Messenger – the iconic mobile social network previously exclusive to BlackBerry smartphones – on iPhones and Android, is currently posing a huge threat to the short messaging services revenue of telecoms companies in Nigeria.

Most Nigerians, who hitherto used their iPhones and Android devices to send text messages, are now savouring the BBM service on their phones to achieve the same goal free of charge.

BlackBerry had last month finalised the rollout of the BBM on iPhone and Android devices and made it available as a free download in Google Play and the App StoreSM.

A report by the global consulting firm, Price WaterHouse Cooper, had put the total SMS volume for 2012 at 1.8 billion (on-net and off-net).

According to the firm, the figure is expected to grow by 35.4 per cent in 2013.

This, therefore, puts the expected SMS volume for 2013 at 2.44 billion. Multiplied by N4 charge per SMS, the industry is estimated to generate about N9.75bn as SMS revenue.

Earlier this year, over N7.07bn was estimated to be lost by telecommunications operators in 2013 following the directive by the Nigerian Communications Commission to all operators to reduce the cost of off-net Short Message Services to N4.

The NCC had, in January, issued a directive to the telecoms operators that off-net SMS tariff should be slashed to N4 from N10.

The BBM to iPhone and Android is expected to increase this woe, as patronage for the SMS package is expected to further nose-dive.

Outgoing on-net SMS, according to the Price WaterHouse Cooper report, increased from 911 million in 2011 to 958 million in 2012; outgoing SMS to other mobile operators moved from 316 million to 449 million, while SMS from other mobile operators also increased from 327 million to 421 million during the same period.

An off-net SMS is a text message sent from one network to another such as from MTN to Airtel or Glo to Etisalat. And within a network, it is referred to as on-net SMS.

Commenting on the development, the President, National Association of Telecoms Subscribers, Chief Deolu Ogunbanjo, in a telephone interview with our correspondent on Wednesday, said the introduction of BBM on iPhone and Android would seriously slash the SMS revenue expectations of telcos subsequently.

Culled from PUNCH