SMS in South East Asia: 3 different paths

Cultural, calligraphic  & technical factors at play in explaining diverse text messaging markets in region

The Association of Southeast Asian Nations (ASEAN) account for over a quarter of global SMS traffic. At the same time, they have widely diverse SMS markets that can be classified into 3 groups: 1) Indonesia and the Philippines where texting is a way of life and SMS revenues remain vital to the industry; 2) Malaysia, Singapore and Thailand where 4G networks and smartphone adoption is pulling cellphone owners to use Over The Top (OTT) alternatives for messaging; and 3) Indochinese nations where SMS never really took off with a key factor being limited availability of local character sets on cellphones.

Indonesia and the Philippines are in a class of their own both within ASEAN and the world. Filipinos send more text per user than any other country on the globe while Indonesia has the largest volume of SMS traffic in the region. Texting is a vital part of mobile operator revenues in these two countries generating US$ 3.5 billion in 2014 and accounting for almost 2/5ths of the total in the Philippines and a little over 1/5th in Indonesia. Though there has been some substitution by Internet-based texting applications, there has not been a wholesale decline, thanks in part to smart operator management trading extremely low text prices for volume. SMS is a way of life in both countries where as far back as 2008 it was cited as a “killer application” in the Philippines (SIDA, 2008, The innovative use of mobile applications in the Philippines) and the 2010 Indonesian census is referred to as the "SMS Census" (PRB, 2010, Communication Surprises in the 2010 Indonesian Population Census). The use of the Latin alphabet in these countries has also been a major factor driving texting. 

The smartphone revolution is impacting text markets in Malaysia, Singapore and Thailand. This trio has the highest smartphone penetration in the region and at 88% of the population, Singapore has the 2nd highest smartphone penetration in the world, after the UAE. While both Malaysia and Singapore had high texting usage in the past—partly due to widespread use of English and in the case of Malaysia, the Malay language using the Latin character set—it has been declining rapidly since 2010. SMS never really took off in Thailand due to the calligraphic challenge of typing Thai on a small cellphone. Any hope of it doing so effectively died when operators were awarded 3G frequency and rapidly migrated their subscribers to the new networks to avoid paying revenue sharing fees with the government. Thai operators have been actively promoting smartphones and SMS is estimated to account for only around US$100 million of total mobile service industry revenue in 2014.

Use of Khmer on cellphones in Cambodia

Indochina nations such as Cambodia and Laos suffer from the same problem as Thailand in that they not use the Latin alphabet. Worse, since they are relatively small markets, there was not a major effort to include Khmer and Laotian on older cellphones. Only around a third of Cambodian cellphones were Khmer-enabled in 2013. This figure had risen to almost two thirds in 2015 thanks to rapid adoption of smartphones but means that users will use Internet-based messaging rather than SMS. Another problem is that so many Cambodians were used to not having Khmer on their older handsets they just assume that smartphones don't either (see: Mobile Phones and Internet in Cambodia 2015). Countries in Indochina also persist with higher off-net pay as you go SMS tariffs. This detracts from the major benefit of SMS--it can be sent to any subscriber and not just those that have downloaded an Internet messaging application.

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