InphoMatch, which provides inter-carrier SMS solutions, has reported strong traffic growth in the emerging US market.

According to InphoMatch figures, it has handled 750m inter-carrier messages since launching in November 2001. Virtually all major US carriers now offer inter-carrier messaging services and InphoMatch provides solutions for AT&T Wireless, Verizon and T-Mobile. The company is now delivering 100m messages per month and sees traffic doubling every two months. The figures still fall short of the levels seen in Western Europe and Asia Pacific, but with continued growth the US is potentially one of the largest markets in world for SMS. InphoMatch is looking to expand to Latin America and start delivering ringtones and information services.

“Inter-carrier SMS volumes are doubling every eight to ten weeks in the US,” said Colin Matthews, CEO of InphoMatch. “But our InphoXchange platform is scaleable, reliable, and economical enough to handle the growing level of inter-carrier traffic as well as the expected growth in international traffic and the delivery of premium content services.”

Insight

SMS volumes in Europe exploded when inter-carrier messaging was introduced and it appears compatibility initiatives are having a similar effect in the US. This represents a huge revenue opportunity for network operators. The UK currently sends about 21 text messages per head of population each month. If the US were to do the same, a back-of-the-envelope calculation gives a figure of 60bn messages annually, representing approximately $6bn in data revenues. If InphoMatch’s growth projections are right, this rate could be reached in around 18 months.

However, there are numerous caveats. Firstly, market conditions in the US today are fundamentally different to Western Europe in the late 1990s – virtually everyone has an e-mail account and the free web-based instant messaging concept is firmly entrenched. If the dotcom boom taught us anything, it’s that once people have had something for free, they are unlikely to pay for it in the future. Also, most tariffs in the US do not charge for individual text messages, but bundle them as part of plans including ‘buckets’ of voice minutes.

That said there is a real opportunity for multimedia messaging, which offers something above and beyond what can be done with wireless e-mail or desktop instant messaging. A growing SMS market will provide operators with valuable operational experience and hopefully prepare them for the successful introduction of MMS over the next 12 – 18 months.