October 16, 2003
Text-Messaging May Be Hitting Its Peak in Europe
European mobile-phone companies are famous for making grand predictions of striking it rich on wireless-data services, then failing to deliver. Now, their one true wireless cash cow -- text-messaging -- risks losing momentum, according to the WSJ.
"Europeans will send over 113 billion messages via short-message service, or SMS, this year, according to a forecast by U.S.-based research firm In-Stat/MDRR.
But some analysts say European operators are set to disappoint investors on SMS. They are predicting that European carriers' SMS revenue will peak this year and message volumes will fall after next year. That is a potentially sobering verdict, given that SMS is highly profitable for the operators, with margins estimated above 90%. SMS sales often account for more than 10% of wireless companies' revenue.
"Ken Hyers, a senior analyst at In-Stat/MDR in Newton, Mass., forecasts European SMS message volume and revenue will peak in 2003, with a 24% average annual decline in SMS revenue between 2003 and 2007."
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