Many consumers view SMS as an essential function of their phone.  From a service provider perspective though, it is one of the more highly utilized and profitable value added services, with an estimated over 6 trillion SMS’s sent in 2010.  What’s going on with this seemingly basic function?

First of all, it’s a very good way to non-intrusively, yet pretty much real time, get your message in.  If you get an SMS, it’s not quite like getting a phone call.  It’s not as intrusive so you don’t have to answer it right then and there and disrupt what is going on, but it’s also “there” so you will likely read it and respond within a few minutes.  It’s also a mechanism for entertainment.  For instance, here is a site in India where there are a collection of SMS “jokes” that you can send to someone else.

Enterprises are also using SMS as a way to proactively communicate with their customers.  Most of you can probably set up your bank or airline right now to proactively SMS you as a way to communicate status or changes to you.  This is good for them since they ostensibly keep you informed and thus happy, but also is good for them since it likely cuts down on costs by cutting down on contact center interactions.  And this form of communications will only grow.

Additionally, social networking sites such as Twitter utilize SMS.  When Twitter acquired Cloudhopper in April of 2010, it said at the time it was one of the highest volume SMS programs in the world, with close to 1 billion tweets per month.  So let’s assume there are 6 trillion SMS in a year as per above, which means 500 billion per month, meaning twitter itself accounts for .2% of all SMS.  Yes, .2% is small, but it’s amazing to me that that is even measurable at all!

Also, Machine to Machine (M2M) communications utilize SMS.   And M2M is projected to continually grow.  There is also another reason which is the ability of SMS to not just be “boring” text messages.  In a week or two I will explore what a “rich” SMS is.