Metered Data Leads Industry to $19.3 Billion in 2Q Revenues As SMS Cash Cow Stubbornly Holds On Monday Aug 13 2012 12:28 EDT With wireless quarterly reports for most major carriers in the books, and consultant Chetan Sharma offers an interesting analysis on wireless revenue trends. Sharma notes that overall data revenues were $19.3 billion in the second quarter alone, up 19% from a year earlier. As you might expect, AT&T and Verizon dominate the sector, hauling in 68% of the mobile data services revenue with 66% of the subscription base. There's plenty of room for growth; wireless data still accounts for just 42% of all revenues, a percentage that shifts quickly as SMS and voice die. While SMS is dying globally as it's supplanted by push IM services, U.S. carriers have so far held on -- actually seeing a 5% SMS growth in the quarter: quote:
While many of its brethren are seeing messaging volume declines, messaging in the US market grew by 5% YOY and 1% Q/Q. US consumers are now sending messages at the rate of 696 messages/sub/mo. However, most operators are seeing decline in messaging revenue growth due to IP messaging. As expected, this transition will continue around the world at different rates. In the US, while the change is underway, we don’t expect any dramatic declines like in Philippines or the Netherlands in the near-term.
As we've been covering, AT&T and Verizon's shared data plans are all about raising prices dramatically through high overages and per data connection fees, to help offset the inevitable erosion of SMS and voice services. |
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ProfitsI am glad they dont get any of my money. | |
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I'd love to dump SMS........ the problem is that you can't beat it for ease for use. I pondered replacing our SMS plan ($23.40/mo for unlimited) with Google Voice but my fiancee put the kibosh on that because she prefers SMS to voice and doesn't want to give everybody a new number.
We pay about 2 cents per SMS if you divide the cost of our plan by the number of messages we send and receive. That's an annoyingly high number given the low cost to Verizon of providing SMS but what can you do? Texts are useful enough to keep most people on board at the current price point.
I doubt SMS will ever entirely go away, push IM/e-mail could displace it entirely (in theory) but SMS is nearly ubiquitous, and will always remain a useful way to communicate with people, particularly those who don't have smartphones. | |
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Re: I'd love to dump SMS....Agreed. Everybody who has my phone number can text me, but Google Talk/Messenger, Facebook, etc... everybody also has to have some other address and must know to direct their messages another way. The ubiquity of text messaging will ensure its survival until/unless we can direct received text messages to push messaging services of our choosing without having to pay for SMS. | |
| | |  ·ooma
 ·Optimum Online
 ·Verizon FiOS
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Re: I'd love to dump SMS....said by mdlund0:Agreed. Everybody who has my phone number can text me, but Google Talk/Messenger, Facebook, etc... everybody also has to have some other address and must know to direct their messages another way. The ubiquity of text messaging will ensure its survival until/unless we can direct received text messages to push messaging services of our choosing without having to pay for SMS.
you can sign up for an email address which has part or all of your cellphone number... and it's unlikely most people would have the same one if you use more than 4 digits. | |
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|  boogi man
join:2001-11-13
Jacksonville, FL
kudos:1 |
to Crookshanks
given that the sms system is basically a non cost item for the carrier as i understand it being charged as much as they do is frustrating. that being said i'm gad there are unlimited plans as i have 4300 and counting this month and the bill doesn't cycle until 2 september --
my site | |
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Re: I'd love to dump SMS....said by boogi man:given that the sms system is basically a non cost item for the carrier as i understand it being charged as much as they do is frustrating.
Well, it does cost them SOMETHING. The impact on the cellular network is next to nil (texts go out on paging channels when they have unused capacity) but they still have to maintain the back end billing and message routing hardware. They also have to negotiate peering arrangements with other carriers. The margin is extremely high on text messages but it is not infinite. It irks me a little bit to pay what I do for them but at the end of the day I'm the one making the decision to use the service. I could stop tomorrow if I really wanted to, it would just be a PITA to do so. | |
| | | | boogi man
join:2001-11-13
Jacksonville, FL
kudos:1 |
Re: I'd love to dump SMS....no not infinite but like you said extreme margins for sure. --
my site | |
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| rradina
join:2000-08-08
Chesterfield, MO ·Charter
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to Crookshanks
The need to communicate with folks that don't have smart phones will dwindle until all phones are smart phones. In a race to the bottom, feature phone hardware will converge with smart phone hardware. Folks can already get a 99 cent iPhone 3GS with a two year contract.
Cricket = $89 Android phone.
Virgin = $49 Android phone.
Metro PCS = $69 Android phone.
All prices are no contract.
Feature phones no longer have a purpose when it's so cheap to get no contract smart phones. | |
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Re: I'd love to dump SMS....said by rradina:Feature phones no longer have a purpose when it's so cheap to get no contract smart phones.
Eh, I'd dispute this. Feature phones have longer battery life. Feature phones don't require data plans and can be had for a lower monthly rate. There's a broader selection of "rugged" feature phones than there is of rugged smart phones. Feature phones are generally smaller and easier to carry around. Feature phones can be had without cameras and carried into places that prohibit cameras. If one is interested primarily in calling and/or texting there is no reason to own a smart phone. Feature phones will become a niche product but they aren't going away. | |
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Re: I'd love to dump SMS....Great points. If we miss a night of smartphone charging the next day is a nightmare  I actually have a burner flip phone, just in case said mobile laptop dies. $30 PPC for the YEAR.... | |
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Re: I'd love to dump SMS....said by elefante72:If we miss a night of smartphone charging the next day is a nightmare I've had more cell phones than I can remember but two favorites stick out in my mind, both because of battery life: The Motorola V195 and V9M. The former was an extremely basic GSM flip phone. Out of the box with the stock battery it had >8 hours of talk time. The latter was not particularly impressive out of the box, but I found an aftermarket 2,000mAh battery for it, and holy smokes! 10+ hours of talk time and more than three weeks of standby time on a single charge. I've managed to adapt to the power hogging smartphone by making liberal use of my car charger and keeping the phone plugged in at all times other than when it's on my waist. Even so, I really miss the days when I could go weeks without thinking about charging my phone or having to limit my use while away from a charger. Hell, I'd settle for two days of normal use without having to charge it.... | |
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| | | rradina
join:2000-08-08
Chesterfield, MO ·Charter
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to Crookshanks
And who will care about sending a text message to a niche product?
The monthly access from Verizon for a smart phone is $40 and $30 for a basic phone.
The key difference is with a feature phone they allow you to select a 700 minute plan with pay-as-you-go data for $10/month. The smart phone minimum choice is $40/month for unlimited text/talk and 300MB of data.
I'll stand my ground in predicting smart phones will soon be the only phone. | |
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nah40
Anon
2012-Aug-13 9:27 pm
Re: I'd love to dump SMS....I do not want a phone that does not fit in my Levis front pocket.
If it can't do that it is not convenient.
I also have no use for texting, Facebook, Twitter, game playing, etc on my phone.
I just want a telephone. | |
| | | | | |  cork1958Cork
Premium Member
join:2000-02-26 |
cork1958
Premium Member
2012-Aug-14 5:50 am
Re: I'd love to dump SMS....said by nah40 :I do not want a phone that does not fit in my Levis front pocket.
If it can't do that it is not convenient.
I also have no use for texting, Facebook, Twitter, game playing, etc on my phone.
I just want a telephone.
No way!! Everybody MUST have a smart phone. Just like health care, you MUST have one!! Actually, I'm the same way. To see all these kids/people who almost think they can't survive if their smart phone isn't glued to their hands is ridiculous! --
The Firefox alternative.
»www.mozilla.org/projects ··· amonkey/ | |
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to rradina
said by rradina:Feature phones no longer have a purpose when it's so cheap to get no contract smart phones.
people need to understand that it's not the cost of the phone that keeps people away from smartphones, it's the ridiculous mandatory data fees that you have to get along with it. | |
| | | | rradina
join:2000-08-08
Chesterfield, MO ·Charter
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Re: I'd love to dump SMS....I totally agree but until we all either decide to do without mobile devices or the FTC feels it needs to get involved, the feature phone and it's associated plans are doomed.
This isn't cable where at least for the moment, they are obligated to continue providing antenna service/basic cable plans. This is a completely unregulated environment and I predict they'll kill off the feature phone because they've decided they want even the most basic plan to cost $100/month. | |
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to chances14
said by chances14:said by rradina:Feature phones no longer have a purpose when it's so cheap to get no contract smart phones.
people need to understand that it's not the cost of the phone that keeps people away from smartphones, it's the ridiculous mandatory data fees that you have to get along with it. Yep, data is where the margins are. Voice/text not so much. IMO, the only value carrier left is straight talk with 45 dollar unlimited voice/txt/data and 30 dollar month for 1000 minutes voice 1000 text. Like Apple products, the big wireless companies don't offer value for your money. Your supporting huge margins except for the straight talk option. The only reason Verizon/AT&T get away with it is because people are addicted to their smartphones. They knew this and colluded to squeeze out more with metering. To me, its completely insane how much some of my friends are paying for their plans and how addicted they are constantly looking at those little screens. Some are so bad they really need some kind of 12 step program to get their lives back. | |
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| openbox9
Premium Member
join:2004-01-26
Springfield, VA
kudos:2 |
to Crookshanks
You can always request an new number from your carrier and port your existing number to Google Voice. It may or may not be worth the $280/yr savings. | |
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 espaethDigital Plumber
MVM
join:2001-04-21
Minneapolis, MN
kudos:2 |
The revenue graphs are to be expected
More smart phones = more data plans.
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| grayem
join:2000-09-22
Saint Louis, MO |
grayem
Member
2012-Aug-14 8:24 am
TING.com.025 Cents per text worldwide!
So done with contracts. | |
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How about .. |
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