“Why SMS is very much alive in the messaging apps generation”

The following article was written by Vincent Matinde based on his interview with Echo Mobile’s CEO, Boris Maguire. It was first published on IDG Connect on June 18, 2019.”

The entry of over the top services such as WhatsApp, Telegram and Viber, gave major communication companies in Africa and their governments a reason for concern. For the telcommunication companies, their SMS income would drop as more users opt to use “free” messaging apps.

Such services only rely on internet connection and do not have a backhaul of infrastructure the telcos have to put up and maintain. In Ethiopia the government planned to charge OTT apps users because they were affecting income for the state owned EthioTelecom.

However, years after the introduction of WhatsApp and other messaging apps, their cannibalization of SMS is yet to be felt, especially in Africa. Both Kenya’s leading telco Safaricom and Telkom Kenya have offered free WhatsApp bundle for their users, indicating that the domination of messaging services has been highly exaggerated — at least for now.

Even though access to WhatsApp needs data that increases the telco’s data margins, there seems to be little change on its effect on SMS. According to the Communication Authority of Kenya (CA), the telecom regulator, there is still an increase in SMS usage across the country.

In their second quarter for year 2018/19 (October to December 2018) there were over 17 billion net SMS compared to the previous quarter (July to September 2018) where they recorded over 14 billion on net SMS.

In contrast, in 2016 there was a 19.7 percent drop in SMS use and the telcos attributed it to the use of messaging apps. During the period from January to March, the CA recorded only 6.5 billion messages, down from 8.1 billion in the previous quarter.

“The significant drop of SMS traffic could be attributed to the popular use of Over-The-Top (OTT) services like WhatsApp, Hangouts, among others,” said a statement from the Communication Authority of Kenya in 2016.

However, the steady increase in SMS volumes has cemented the idea that text messaging is not going anywhere any time soon.

Text’s unrevealed recipe

So why would people continue using a paid service while there is an almost free option on the table? There are many reasons for this.

“SMS, voice and USSD are the most accessible and familiar communication channels on the continent and the best channels for engaging, influencing and understanding all consumers. These may be ‘old’ channels, but because of their age they allow organisations to connect to nearly every single mobile phone, ever made, anywhere,” said Boris Maguire the CEO of EchoMobile a mobile based survey platform.

The company uses basic communication technology such as text, voice and USSD to get customer sentiments for their clients.

Maguire added that the extent of internet coverage in most African countries can limit the use of messaging apps.

“Right now, SMS, USSD and voice remain the most scalable and effective channels for directly engaging, influencing and understanding the overwhelming majority of Africans. Other channels like IP messengers and social media are growing fast, but they are still accessible only to a minority of consumers,” Maguire stated.

He added that: “The majority of Africans have neither a smartphone nor regular internet access. In my experience, many of those who do have smartphones and access to internet are extremely limited in the extent to which they actually use ‘smart’ features, and they are extremely careful about their data usage.”

The interoperability of SMS has also handed messaging apps a beating, for now. Maguire explains that regardless of the telco, any user can send a text message to anyone. But for messaging apps, you have to be on the same platform. A Telegram user cannot message a WhatsApp user.

Interoperability maybe a hindrance, but most smartphones these days can accommodate multiple messaging apps.

Enterprise SMS to the rescue

Most companies that need to speak to their target audience have opted to use text messaging as the number one mobile phone channel. Whether it is to communicate a new promotion, confirm money transfer or a winning bet, most enterprises solely rely on SMS due to its universal nature.

Two-factor authentication has also enabled the use of SMS in delivering safe and secure systems for many users across the globe.

“Using WhatsApp for enterprise conversations, surveys, marketing, feedback or any other critical use case requires a lot of time and effort by the enterprise. For all that effort, enterprises in Africa can only use WhatsApp to engage a small minority of consumers. Once they do, there is no way to collate and analyse the results of that engagement to inform critical business decisions,” Maguire reiterates.

“Cars themselves are pretty old technology at this point! But if you’d asked ‘why is old tech like the automobile so popular in the era of over the top services like airplanes and space shuttles?’ I’d give you the same answer: access and tech!” he quipped.

Back to the Future

It was believed that the death of SMS would be through mobile internet. But it has reinvented itself to still be more relevant than before.

Of course, the future of SMS is a debatable one. One could argue that the “old” tech doesn’t accommodate multimedia easily as social media and messaging apps. This could be one of SMS’ Achilles’ heel — that going forward innovation on top of SMS would be hard.

However, this debate can start again once phone manufacturers are confident to release smartphones without SMS capabilities.