Thursday, February 21, 2008

SMS : A 23 Years Old Cash Cow

Want to know how rich are the cellular operators todays ? Let us make some calculations! For simplicity, we only consider Short Messaging Service (SMS) offered by the largest domestic operators: Telkomsel (TSEL), Indosat (ISAT) and Excelcom (XL).

The SMS production rate of these operators is quite fantastic. As of 2007, together they produced more than 400 mn SMS each day on average. Peak SMS production rates, which may happen in some special occasions, could be in the range of 1.5 to 2.0+ of the average rate. Detail average production rate for each operator can be seen in the picture.

Based on the current pricing and promotional schemes, the revenue obtained by each operator from Short Messaging Services is as follows. Note that this is the revenue for a single day!

The revenue given above contributes to around 20% - 30+% of the operators' total revenue.

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