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.