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Text Messaging reaches its 20th Anniversary

December 17th, 2012. Two weeks ago, the text message officially celebrated its 20th anniversary. The first text message – or SMS, for short message service – was sent on December 3rd, 1992 from a text engineer in London to a colleague. It said, simply, “Merry Christmas”.

Reports in BBC, Venture Beat, and The Wall Street Journal highlight the reluctant “Father of SMS”, Matti Makkonen, who had initially started developing the idea eight years before its final implementation. In an interview conducted by SMS, Makkonen stated to the BBC that, “Twenty years ago, I didn’t see SMS as separate issue – it was just a feature in the revolutionary mobile communications system. Very useful for quick business needs”.

This 20th anniversary provides an opportunity to reflect on the role text messages and mobile technology have played in shaping the last two decades – and how they will continue to do so in coming years.

Irrespective of Makkonen’s initial intent for the technology, text messaging has become a fundamental form communication globally – and not just for ‘quick business needs’. The growth in total text messages has been exponential. A decade after the first text message was sent, there were a total of 250 billion text messages sent in 2002. Nearly a decade after that, in 2011, this number grew to 7.4 trillion. With total mobile subscriptions totaling roughly 6 billion that year, 1250 SMS were sent per user per year on average – or nearly 4 per day. This positions SMS as one of the basic, daily ways that people are interacting. In places like Colombia, text messaging is widely regarded as the cheapest method of communication – above regular phone calls.

Text messaging has played a particularly strong role in facilitating communication in emerging markets. Mobile technology has typically had lower barriers to access to individual consumers than the Internet because once the infrastructure is laid to create connectivity, a basic cellphone will generally cost 5% what a basic computer costs in those markets. For countries where large percentages of the population are poor, this cost differential allows people to access mobile phones and communicate in unprecedented ways. This is why places like Brazil, Colombia, and Vietnam have over 100% mobile penetration rates, meaning there are more mobile phone subscriptions than there are people – and why China, India, and Mexico are not too far behind, within the range of 75-85%.

The access to information provided by text messaging has become a critical tool for development, lifting thousands, maybe millions, out of poverty in the span of a decade. Clever implementation of SMS has been undertaken in all sorts of industries: banking (for example, the now well-known M-PESA); agriculture (highlighted by Grameen Foundation); health (Medic Mobile); not to mention employment and recruitment. To describe the scale of the gains that are possible, recent report by Vodafone and Accenture shows that, by 2020, implementing a range of mobile agriculture solutions could increase total income for the 500 million smallholder farmers across 26 countries by US$ 138 billion – an increase of 11%.

What about the future of text messaging? It is difficult to say exactly where SMS will be another 20 years after its beginnings in 2032. It is clear, however, that text messaging will continue to shape communication for at least the next decade.

While smartphone penetration is increasing rapidly in most markets, levels are still low. In Mexico, only 14% of total mobile subscriptions are via a smartphone, and in Brazil this is still barely 20%; in India, this number is incredibly low, at 4%. In these countries where poverty and low incomes persist and there is still a cost differential between basic mobile (SMS, voice) and smartphones in both hardware and service pricing, traditional feature phones will continue to be relevant in these markets.

Without a doubt, companies that are prepared to adjust to a dynamic mobile market – one that is not so slowly shifting from the domination of most basic phones towards an elevated penetration of smartphones – will be best positioned to take advantage of the opportunities in rapidly changing emerging markets. But, chances are, the text message will still be a key building block of communication technologies in emerging markets – and will create the strongest opportunities to connect to the most disconnected markets.

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