The increasing use of IP-based social messaging services on smartphones is taking a hefty toll on telecom operators with SMS revenues continuing their decline.

The dramatic rate of this decline has been highlighted in technology analyst Ovum’s latest survey, which shows operators lost $US13.9 billion in lost SMS revenues in 2011 due to social messaging.

The bad news is that Ovum expects the decline is only going to get worse as savvy mobile consumers give SMS the flick and telco operators need to rework their “legacy services” to secure their position in the messaging market.

“Social messaging has disrupted traditional services, and operators’ revenues in this area will come under increasing pressure,” Ovum consumer analyst Neha Dharia said.

According to Ms Dharia, telcos need to look at social messaging as an opportunity but a successful strategy must implement closer co-operation between telcos as they face the challenge posed by major internet players.

Operators may also benefit from forging closer relationships with app developers, share end-user data with them and allow integration with the user's social connections.

“Tapping into the creativity of app developers, forming industry-wide collaborations, and leveraging their usage data and strong relationships with subscribers are the key ways for operators to ensure that they hold their ground in the messaging market,” Ms Dharia said.

“Working closely with handset vendors will also be important; they control some of the most popular social messaging apps, and can also provide preloaded applications,” she added.