Is Text Messaging Revenue About to Fall Off a Cliff?

Over the top messaging alternatives have been a growing concern in most European markets for some time. The issue is whether 2012 might now prove to be a watershed year, when use of text messaging went into a permanent reversal.

Consider that Telefonica's revenue from European operations during the first quarter of 2012 was down 6.6 percent, following a dip of seven percent in the fourth quarter of 2011.

The bright spots came in Telefonica's Latin American operations and mobile data services. But there are indicators of trouble, even there.

Telefonica’s first quarter 2012 report might indicate that even mobile services are not immune from economic troubles, and might also indicate a significant current impact from over the top messaging alternatives,  according to a report in Forbes.

Spain’s economy is contracting sharply, with consumer spending falling by double digits. That seems to be putting pressure on uptake of mobile broadband services and could be leading consumers to abandon carrier-provided text messaging services as well.

WhatsApp Messenger, for example, is the number-one paid app downloaded by consumers in scores of countries. In fact, some might speculate that 2012 will be a watershed year, an inflection point for consumer use of carrier-provided messaging in many countries.

Spanish mobile revenue declined by -10.7 percent year over year. That might be a signal as well. To be sure, the severe and apparently growing economic and financial crisis in Spain arguably is a huge driver of consumer behavior, but the shift in text messaging behavior might be something more.


To be sure, it is a virtual certainty that mobile voice and mobile messaging revenues are products like any other. That is to say, they will have a product life cycle featuring growth, maturity and then decline. 


The only issue is when the decline might begin. In Europe, we might find out soon.