SMS texting

Photograph by Melina Manfrinatti

Instant messages from within apps such as WhatsApp, Apple iMessage, Facebook Messenger, and BlackBerry’s BBM have overtaken SMS texts for the first time according to research firm Informa.

According to their research, almost 19 billion instant messages wer sent per day around the world in 2012, compared with 17.6 billion “traditional” SMS text messages. This change comes as smartphones have become more common around the world, including in developing markets where cheap Android smartphones from Chinese manufacturers are available for under £30 without a contract.

The success of SMS over the previous two decades came as a surprise to network operators who originally did not charge for the service. However, as more people, and especially young people, began to use the service more regularly, the operators started charging per text or bundling them with contracts with revenues reaching $128 billion (£82 billion) from SMS worldwide in 2011 according to Portio research. At only 140 bytes of data, with costs negligible to send and receive, text messages are often considered the most valuable data service ever created.

As instant messages are simply considered as data by network operators, and come bundled within people’s 50MB – 1GB monthly allowances or topups and not charged for individually, the move from SMS to instant messages is likely to have a major impact on operator profits. Research firm Ovum are already estimating that the growth in these apps meant that network operators lost more than £23 billion (£15 billion) SMS revenue in 2012.

Voice calls are also being affected by the move towards VoIP apps such as Skype, where again network operators are only charging for the data used in the call, rather than the lucrative per minute fees they have become used to.

As people’s habits change, and the mobile phone networks begin to be used more and more as “dumb pipes” of data, operators will be looking for new revenue streams, and issues such as net neutrality will come into focus, as they try to charge users more to stream video from YouTube than from a competing and paying competitor for example.

Where both voice and SMS texts do currently beat their in-app competitors is that they are universal. Everyone with a mobile phone can send a text or make a call to anyone else on the planet who also has a phone. In-app messages can only be sent to other people using the same app, and for the calls to be free Skype calls can also only be made to other SKype users, although people can call regular phone numbers for a fee. This has created a number of overlapping walled gardens, and whilst some services such as WhatsApp and Skype are available across all platforms, they tend not to be the default messaging apps for people because their friends and family still may not have the app installed.

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