Many have declared SMS obsolete. Industry reports show over-the-top (OTT) messaging traffic growing rapidly—Informa predicted OTT volumes would be twice those of person-to-person (P2P) SMS by the end of 2013, and last year more than 19.1 billion OTT messages were sent. Those figures demonstrate a real impact on SMS traffic and operator revenue.
However, the story isn’t as simple as “SMS is dead.” Operators’ feedback and analyst data indicate SMS will remain relevant for years. Informa projected that SMS revenues would continue to grow at least through 2016, and operator experience doesn’t support the narrative that SMS has no future. Much of the “SMS is dying” rhetoric stems from hype around OTT apps and their rapid adoption, not from the broader realities of communication markets.
In the near term, markets will continue to rely on SMS even as OTT usage expands. That said, operators face a clear commercial challenge: OTT messaging has already eroded some revenues. Ovum estimated operators could lose around $32.6 billion in messaging revenue in 2013 to OTT services, and carriers must consider how to recapture value or offer services that compete with apps such as WhatsApp. To date, many operators have been on the defensive rather than leading the response.
SMS extends far beyond simple messaging
A key advantage of SMS over OTT platforms is device and network independence. OTT apps require participants to have the same app installed, a smartphone capable of running it, and access to a data connection provided over a mobile network or Wi‑Fi. In contrast, SMS can be delivered where data signals are weak or unavailable and does not depend on specific software. Messages can be sent to virtually any mobile device on any network, anywhere in the world, at any time. This universality highlights SMS’s resilience and the diverse opportunities it enables.
Machine-to-Machine (M2M) communications provide a strong example of SMS’s broader role. SMS can act as a device trigger in scenarios such as fleet management, or be used to initiate data connections. There is a wide range of use cases in M2M that are poised to expand dramatically over the next two to three years. With existing technology already in place, M2M adoption will accelerate if large systems integrators and operators drive implementations at scale.
Within enterprise mobile messaging, SMS is increasingly valued as a secure, reliable channel for customer communication. Businesses appreciate that SMS delivers high deliverability and predictable reach, making it ideal for alerts, authentication, appointment reminders, and customer notifications where timely delivery is essential.
SMS remains the default in emerging markets
One of the most significant dynamics is that the OTT vs. SMS competition largely hasn’t materialized in many developing markets. Low smartphone penetration and limited availability of affordable data plans mean SMS remains the default communication channel. In many emerging markets, innovative services have been launched over SMS with strong uptake—often outpacing comparable deployments in Europe.
The rise of OTT messaging has undoubtedly changed user behavior in some regions, but SMS continues to offer long-term value because it supports a broader set of services and reaches more people. OTT apps and SMS can coexist: OTT apps are excellent for rich P2P chat, but their functionality beyond that is limited. SMS retains significant untapped potential—especially for enterprise use and M2M scenarios—and with an estimated 3.3 billion users worldwide, its reach will continue to drive adoption by businesses and service providers.