"With over 30 billion SMS messages sent during any given month throughout the world, and rapidly increasing, carriers globally have been benefiting from a significant additional revenue stream," said Ted Theologis, Managing Partner and Lead Analyst for the Arena Intelligence Group. "Unfortunately, U.S. wireless carriers have not been able to monetize this segment, due to both the technological differences in the various U.S. networks, as well as the unwillingness to open up the networks to intercarrier traffic."

The Arena Intelligence Group believes, now that the interoperability barrier has started to disintegrate, communication by SMS will become as convenient as voice. The U.S. market is ready to embrace short messaging service and with AT&T leading the way, other carriers are pressured to follow soon.

"There is no doubt that we will see the same growth patterns in the U.S. as we have seen in Europe. VoiceStream is the most likely carrier to follow next, considering its strong European ties, with Verizon Wireless, Cingular and Sprint PCS, following in the first half of 2002," said Theologis.

SMS now contributes over 15% of European carrier revenue, however, of the 30 billion SMS messages sent worldwide every month, the U.S. is responsible for only a fraction. The impact of new standards such as Enhanced Messaging Services and in future Multimedia Messaging Services (MMS), where users can send each other animations and audio-animations, is expected to add a further surge to SMS usage.