Operators ‘losing $7.65bn a year’ in grey-market messaging, conference hears

Mobile operators are losing $7.65 billion a year through revenue leakage from their messaging operations – a sum that is equivalent to $21 million a day.

The revenue is going out through the so-called “grey market”, according to a presentation at this week’s Messaging & SMS World conference in London.

Nick Lane, chief insight analyst and founder of Mobilesquared, told the conference that revenue leakage is going down, but will still be $30 billion between 2017 and 2022. He expects lost revenue to be just under $4 billion in 2022.

“If every message was white, the [messaging] market would be worth $19.3 billion in 2017, growing to $30.1 billion in 2022,” Lane told the conference. That’s a compound annual growth rate of 9%, he added.

The report, Global A2P SMS messaging forecasts 2017-2022, was prepared after Mobilesquared spoke to operators, aggregators and other companies in the business.

There will be 1.7 trillion application-to-person (A2P) messages sent this year, said Lane, and that market will grow to 2.8 trillion in 2022. “Global traffic will grow 67% during the forecast period,” he told the conference.

Asia dominates the market, accounting for 83% of A2P traffic this year, while North America will account for just 6%.

The grey market currently has a 48% share, but that will drop to 15% in 2022, he forecast.

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