William Dudley, Group Director, Messaging & GRX Products at Sybase 365, argues that reports about the demise of text messaging are premature

Recently, industry media have been abuzz with headlines, blogs, and articles regarding the imminent demise of SMS due to cannibalization by Mobile Instant Messaging (MIM). Most often, they were quoting a study from TNS Global Telecoms Insight (GTI) that states that instant messaging will ultimately displace SMS (and to some extent, email) as the primary non-voice P2P communications medium for mobile phones.
While the study and its methodology are both sound, the conclusions drawn may be slightly flawed. MIM has yet to take on the viral attributes of SMS. For those who use MIM frequently most likely within their own community of friends and associates – it may work well, and these particular users may very well use less SMS and more MIM. However, the simple fact is that until MIM and instant messaging overcome their fractured  mass of incompatible communities (e.g. AOL IM, MSN IM, Google Talk, ICQ, and of course the GSMA's Personal Instant Messaging [PIM]), they will not have the same mass global appeal that SMS has enjoyed for the past few years.

Solid growth
In the United States, SMS continues its solid traffic growth, with a doubling of traffic volumes from first quarter 2007 through first quarter 2008. M:Metrics reports that SMS subscriber usage in the US has reached approximately 50% penetration. In Western Europe, subscriber usage ranges from the high 70s to mid 80%. MIM usage rates, on the other hand, are still quite low, averaging less than 5% of the Western European subscriber population, with a better showing at 8% of the US subscriber population. Drilling down even further, one can find that MIM usage among surveyed subscribers is even lower for operators purported to have launched the GSMA's PIM, with the highest service usage usually MSN's instant messaging service.
Still, according to the M:Metrics data, when looking at the growth of the US subscriber population using MIM at least once per month over a one year period, we see a growth rate of 21%, while over the same time period, SMS grew 23% to almost 50% of the subscriber population using it at least once per month. Given the substantially larger base of SMS users, the 23% growth rate is essentially non-comparable to the 21% growth of MIM use with regards to the numbers it represents.
Additionally, accounting for a doubling of volume, while the number of subscribers that use SMS only grew 23%, it is evident that the frequent SMS users are sending even more messages. While several other countries have even stronger MIM usage among subscribers  – China, for example, grew to 11% of their subscribers using MIM in February 2008 – this does not show signs of the viral growth patterns that SMS has demonstrated previously, and still does in many markets. Consequently, any talk about the demise of SMS as a simple, non-voice medium is speculative at best, and misleading at worst.

Universal access
SMS provides a level of ubiquity that MIM will struggle to achieve. While Internet access from mobile phones is not yet universal (but is becoming more so with the greater prevalence of 3G networks), one would assume that this does in fact, bode well for MIM, and badly for SMS. Indeed, the TNS GTI press release states:
The cost of instant messaging is next to nothing, as the only cost is a very small data transfer fee. With consumers being accustomed to instant messaging from their PC from companies like Yahoo and Microsoft, and more mobile operators offering unlimited use of web browsers, the take up of MIM is going to increase significantly – leaving SMS and fixed email from PC behind.
And indeed, if one takes a look at some of the 3G-only operators, such as Hutchison-Whampoa in the UK, M:Metrics shows the MIM usage as 11.4% – one of the highest in Western Europe, which appears to support TNS's conclusion that SMS and email are left behind as MIM increases. Equally, however, we see that Hutchinson-Whampoa's SMS usage by subscribers is also amongst the highest in Western Europe – as are its usage of email, MMS and other Internet-driven services. This tells us that the 3G-only network subscribers are heavy users of both Internet and traditional mobile messaging services. While the Hutchinson case is only one operator example, this type of higher MIM usage shows that the reality is such that even where MIM is well-used among subscribers, it still has not, and will not, cannibalize SMS traffic anytime soon.
Finally, as we look to the future, we are already seeing IM-like features creeping into the SMS ecosystem, combining some of the desirable features of IM, such as presence and threaded messages, with the ubiquity, reach, and simplicity of SMS, and further discrediting the notion that MIM will displace SMS any time soon.