Kontan daily newspaper today reported that between June and September of this year there had been an average decline of 13% in monthly SMS deliveries across Indonesia’s mobile networks according to the Indonesian association of telecommunication interconnection clearing (Askitel). Askitel is an agency that calculates and processes data transfers that occur between the country’s mobile networks. The diminishing SMS traffic is attributed to the increase in the use of internet based text messaging as well as the introduction of shared interconnection cost.
Prior to June, Indonesia’s mobile carriers had been accustomed to keeping all the cost and revenue related to SMS messages delivered from their networks. This is known as the sender keep all scheme.
The previous scheme was implemented under the belief that people would exchange SMS equally across networks, that any single SMS delivered would be reciprocated. In other words, a one to one model.
As the industry expanded, carriers began to entice customers by allocating them dozens, or in some cases thousands, of free SMS messages per customer. Naturally several carriers then had to incur much higher costs associated with only receiving those massive amounts of messages since SMS spammers took advantage of the promo which had been run by a small number of carriers. This was the reason behind the move towards a shared cost model.
Once the shared cost model was put in place, there was a reduction in free SMS allocation given out to customers and therefore a reduction in the amount of SMS delivered across networks.
At the same time, the adoption of internet based text messaging rose thanks to mobile apps such as BlackBerry Messenger and WhatsApp as well as social networks, according to Herdy Harman, head of Askitel and VP at Telkom Indonesia.
With mobile Internet usage reaching 48% of all Indonesian Internet users according to Nielsen, Harman said that the rising adoption of smartphones is pushing mobile data ahead which led to the rise in Internet-based messaging.
According to Askitel, there had been 28 billion SMS delivered across Indonesian mobile carriers in June. July saw this number reduced to 22 billion, followed by 20 billion in August and 18.5 billion in September.
In other words, Indonesians sent 34% fewer text messages in September compared to June. While this is a significant development, the data probably would have been more meaningful had the numbers for May and earlier months were also reported and if Askitel had been able to determine how much of the fall can be directly attributed to each of the factors.
Kontan also reported that Indosat has spent Rp 3 trillion which makes up half of its capital expenditure to improve its data network according to Erik Meijer, Indosat’s Chief Commercial Officer.