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Revenue from mobile instant messaging (IM), mobile email and multimedia messaging service (MMS) is expected to rise dramatically between 2006 and 2011, according to a new report, Person-to-Person Mobile Messaging in Western Europe: forecasts and analysis 2006–11, published by Analysys (, the global advisers on telecoms, IT and media.

However, while the volume of short message service (SMS) messages is expected to grow steadily, revenue from SMS is likely to peak in 2008 as increasing competition among operators drives down prices and, along with them, average revenue per user (ARPU) from messaging.

According to report author Windsor Holden, “While operators are launching unlimited bundles of messages as a means of both retaining customers and sustaining messaging ARPU, this strategy can expose operators to price-based competition and reduce their options for increasing messaging ARPU in the future.”

However, the report cautions that, for IM services to realise their potential, operators need to deploy network-independent open protocols to ensure interoperability between, and integration of, fixed and mobile services. “In the fixed environment, the prevalence of closed protocols means that the messaging base is primarily composed of a number of isolated communities,” says Holden. “If this were to be emulated in the mobile space, operators would be denying themselves any opportunity of accruing inter-network revenue and would be preventing IM from developing into a truly mass-market application.”

Key findings from the report include:

- Total mobile messaging revenue is expected to peak in 2010 at EUR26.1 billion, up by 42% on the 2005 total of EUR18.4 billion.

- The growth of messaging spam might act as a disincentive to service adoption, as operators offer more flat-rate messaging bundles providing spammers with a greater opportunity for mass distribution of messages.

- While interoperability issues have largely been resolved for MMS, the high proportion of MMS messages that fail during the sending process has clearly been a major deterrent to repeat usage.

Other key growth factors and challenges facing this industry, such as pricing structures, ease of use, device features and regulation, are covered in the report.

The report also provides detailed forecasts of adoption levels and rates, spend, overall ARPU, service ARPU, average spend per user and revenue for SMS, MMS, mobile email and mobile IM for six key markets (France, Germany, Italy, Spain, Sweden and the UK). Forecasts of subscriber numbers, adoption level and revenue are split by market segment (residential contract, residential prepaid, large corporate and SME) and technology generation (2G, 2.5G, 3G and 3.5G).

The report is available to purchase online at priced at GBP1700 (approximately EUR2450) plus VAT. For more information, telephone Analysys on +44 (0)1223 460600 or email

For all media enquiries please email or telephone +44 (0) 1223 460 600.

About Analysys

Analysys provides strategy and management consultancy, information services and start-up support throughout the telecommunications, IT and media sector. Its grasp of market dynamics, coupled with creativity, rigour and renowned objectivity, enables Analysys to consistently exceed the high levels of quality and innovation that its clients expect. The company has over 160 staff worldwide, and, as part of the Analysys Mason Group, has offices in Cambridge, Dublin, Edinburgh, London, Madrid, Manchester, Milan, Paris, Singapore and Washington DC.

Media contact:

Gina Ghensi
Tel: +44 (0)1223 460600
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