Industry players say cellular SMS boom set to continue
Industry players say cellular SMS boom set to continue
Tony Hotland, Jakarta
When the short message service (SMS) facility was first
introduced by the cellular industry several years ago, the
response was quite overwhelming, as many started switching to
cellular operators that provided the service.
Such a response was inevitable as SMSs allow subscribers to
communicate simply via text messages, instead of voice.
At present, the contribution of the service to total revenues
received by cellular providers is already significant and
continues to grow.
Association of Indonesian Cellular Operators (ATSI) chairman
Rudiantara said that non-voice services, mostly in the form of
person-to-person SMSs, accounted for 23 percent of the total
revenues of the country's cellular industry last year.
"The proportion is expected to rise to around 28 percent to 30
percent this year, and to 35 percent next year," he told The
Jakarta Post over the weekend.
According to Rudiantara, the industry earned no less than Rp
15 trillion (US$1.65 billion) last year and is projected to stash
Rp 22 trillion this year.
Factors behind enthusiasm towards non-voice services are their
lower rates compared with those for voice services and the
increasing variety of SMS-based applications. The whopping number
of new cellular subscribers, who are mostly from the low-income
bracket of society, has also given a boost to the use of SMSs.
"There are around 23.5 million subscribers now and the average
number of messages sent per subscriber is three per day. This
means that around 60 million to 70 million messages are sent per
day.
"Furthermore, as the industry has begun to touch people on
lower incomes, who are more price-sensitive, the SMS is really
the first option for them," he explained.
A short message containing around 170 characters costs up to
Rp 300, while a one-minute local voice conversation costs Rp
1,000 to Rp 1,500.
Telkomsel spokesman Suryo Hadiyanto agreed with Rudiantara,
adding that the trend in communications had taken a different
direction.
"The SMS has replaced many activities considered to be a waste
of time, such as letter writing or sending greeting cards. The
added value of SMSs is really great," said Suryo.
He said that Telkomsel SMS traffic went up from 25 million
bits last year to the current 40 million bits per day, but the
number could double on holidays like Christmas and Idul Fitri.
On the other hand, SMS-based applications -- such as mobile
banking, quizzes, polling, data access and ringtone download --
have also been adding a boost to non-voice services.
"Such applications contributed 3 percent of the total revenue
from non-voice services last year and are projected to be 5
percent this year. It's quite significant, especially with the
current boom in TV shows that invite their viewers to participate
via SMS," said Rudiantara.
Asked if the increasing portion of revenue contributed by non-
voice services could lead to higher rates for the services,
Rudiantara dismissed the possibility.
"It's hard to increase rates here, especially with so many
competitors. With our kind of cellular industry structure, it's
hard to compete if you set rates that are higher than those of
your competitors," he noted.