By Costantine Sebastian
Weekend Editor
Dar es Salaam. The spread of mobile phones has ushered in a new era of convenient and easy mode of communication for billions of people around the world. Developing countries, in particular, are enjoying unique benefits from the wireless revolution as people living in far-flung towns and remote villages can now easily keep in touch with each other— many for the first time.

Telecoms experts and cellular telephony strategists say that among the most popular components of the cell phone, especially in poor economies, is the text communication service or SMS, which stands for short message service (SMS). According to them, SMS text messaging is currently the most widely used data application in the world-- with 2.4 billion active users by 2009, or 74 per cent of all mobile phone subscribers.

In a recent report, a UK-based telecoms and media company says that nearly nine trillion text messages (SMS) will be exchanged each year by 2015 globally, and some 3.8 billion of them will be sent and received by mobile users in Tanzania.

The company, Informa Telecoms & Media, which is a leading provider of events, research and training services to the global telecoms and media community. It says it forecasts that level of SMS traffic to generate nearly $137 billion. At the current exchange rate of about Sh1, 500 per dollar, that amount of money amounts to about Sh205.5 trillion, which is almost 17 times more than Tanzania’s current budget of Sh11.6 trillion.

According to telecoms research firm Pyramid Research of the US, text messaging generated $49.4 billion in revenues for cell phone companies worldwide in 2005. In 2008, 4.1 trillion text messages were sent globally, making SMS a massive commercial industry, worth over $81 billion dollars as of 2006.

“Global SMS revenues are forecast to rise to $136.9 billion in 2015 from $105.5 billion in 2010, while global SMS traffic is expected to increase to 8.7 trillion messages in 2015 from five trillion messages in 2010,” Informa Telecoms & Media notes in its latest ‘Mobile Messaging’ research, published early this year.

However, the company cautions that SMS will remain a significant source of revenues and traffic for mobile operators on a global basis only until at least 2015. After that, texts will remain a key mobile messaging medium, but growth in SMS revenues will likely slow down or fall, particularly in the developed markets, the researchers further note in a statement.

According to the statement, mobile operators may lose a significant cash flow if they do not act timely to introduce or enable the introduction of new and innovative SMS-based services. Currently there are nearly 1,000 mobile operators in the world, out of which 750 are members of the GSM Association that operates in 219 countries with about five billion users.

“Informa Telecoms & Media calculates that about 2.2 billion SMSs were exchanged in Tanzania in 2010, generating a total of about Sh100.65 billion ($67.1 million) in revenues,” the company’s PR manager, Ms Denise Duffy, told Insight via email late last month.

In Tanzania there are currently seven mobile operators, with a subscriber base of 21.2 million users by December last year. The three top operators are Vodacom, which was the market leader with the lion’s share of 41 per cent; followed by Airtel, whose market share was 28 per cent; and Tigo, which saw its grip of the market slip to 21 per cent between October and December, from 22 per cent in the previous quarter.

The other players are Zantel (eight per cent), TTCL Mobile (one per cent), Sasatel (0.12 per cent and Benson (0.01) per cent. The subscriber bases of these four companies by the end of last year were 1.7 million; 246,019; 24,827 and 2,396, respectively, while Vodacom had 8.6 million subscribers, Airtel 6.02 million and Tigo 4.4 million. 

In its latest market report, Tanzania Communications Regulatory Authority (TCRA) says national data traffic increased tremendously in the last quarter of last year compared to the July- September period. The regulator’s figures also show that on-net SMSs increased from 295,911,180 to 536,700,873 while off-net texts went down from 156,271,060 to 142,424,035.

“Mobile operators are spending heavily on rollouts of LTE and other high-speed mobile data networks, leaving relatively little in the budget for messaging services; however, SMS remains a core service for mobile users and continues to account for the vast majority (80 per cent in 2010) of their data-and-messaging revenues,” comments Ms Pamela Clark-Dickson, senior analyst at Informa Telecoms & Media and author of the Mobile Messaging research.

“SMS will continue to be the most popular form of messaging for a number of reasons: universal access and interoperability across devices and mobile operator networks, ease of use, reliability, and low cost.”

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