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Is the SMS Cash Cow Finally Dying?
SMS Growth Finally Slows as IM Clients Rise
Looking at the big picture long term, it's not hard to see how truly open smart phones on truly open networks could make wireless carriers nervous. Mobile VoIP may someday pose more than a passing threat to wireless voice minutes (if carriers ever stop crippling such apps), while IM services may ultimately start taking more serious aim at that the wireless industry's true cash cow: SMS and its huge profit margins. While U.S. cellphone users sent and received more than 1 trillion texts in the second half of 2010, the Wall Street Journal notes that this was just an 8.7% increase from the prior six months, the lowest growth rate since text messaging exploded. Given the majority use of simple-feature phones carriers have many years left to enjoy SMS revenues, but with voice and SMS being just data, carriers are anticipating this lost revenue by killing off unlimited data plans and lowering the caps and pushing per byte overages.
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way2evil
Premium Member
join:2007-09-14
New York, NY

way2evil

Premium Member

About time

Its taken long enough to kill the stupid SMS pricing schemes.
en103
join:2011-05-02

en103

Member

Re: About time

I agree....
$15 for unlimited SMS/MMS only - limited to 160 characters
vs.
$25 for 2GB of data (which includes email / IM / http / and just about anything else )
hottboiinnc4
ME
join:2003-10-15
Cleveland, OH

hottboiinnc4

Member

Re: About time

could go back to 50cents per message or $15 for 125 messages? I'm sure you'd be happy with that? Maybe taking the data cost out of your voice minute plan again? hmm...seems like a good idea from a carrier stand point. Be glad that they don't do that anymore or as Sprint used to- charge you even to talk to Customer Service or make you talk to Clare.

doh
@sbcglobal.net

doh

Anon

Re: About time

They can charge whatever. There are many free SMS apps out there. Google Voice for one!
said by hottboiinnc4:

could go back to 50cents per message or $15 for 125 messages? I'm sure you'd be happy with that? Maybe taking the data cost out of your voice minute plan again? hmm...seems like a good idea from a carrier stand point. Be glad that they don't do that anymore or as Sprint used to- charge you even to talk to Customer Service or make you talk to Clare.


kapil
The Kapil
join:2000-04-26
Chicago, IL

kapil

Member

All Your Base...

....are belong to IP. All proprietary, limited ways of transmitting media will eventually die off. Also, I've been using IM on mobile phones since the 90's...just because the fanboys and teeny boppers have discovered it doesn't mean it's a new invention.
Expand your moderator at work

south1178
Premium Member
join:2001-12-17
Cleveland, OH

south1178 to kapil

Premium Member

to kapil

Re: All Your Base...

said by kapil:

....are belong to IP. All proprietary, limited ways of transmitting media will eventually die off. Also, I've been using IM on mobile phones since the 90's...just because the fanboys and teeny boppers have discovered it doesn't mean it's a new invention.

Yes but IM back then and until a few years ago was based off SMS, not data.

kapil
The Kapil
join:2000-04-26
Chicago, IL

kapil

Member

Re: All Your Base...

Not all. There were certain third party IM clients that did that. AOL/AIM did, and still does, IM forwarding via SMS....but I've used native IM apps that use data since the 90's.

south1178
Premium Member
join:2001-12-17
Cleveland, OH

south1178 to kapil

Premium Member

to kapil
Other than BB Messenger, I've never heard of any that only use data.

kapil
The Kapil
join:2000-04-26
Chicago, IL

kapil

Member

Re: All Your Base...

Blackberry has had native apps for AIM/MSN/Yahoo/ICQ/Gtalk for ages. AIM and MSN IM apps have existed for Windows Mobile and Palm for well over a decade now. All IP.

Matt3
All noise, no signal.
Premium Member
join:2003-07-20
Jamestown, NC

Matt3 to kapil

Premium Member

to kapil
said by kapil:

....are belong to IP. All proprietary, limited ways of transmitting media will eventually die off. Also, I've been using IM on mobile phones since the 90's...just because the fanboys and teeny boppers have discovered it doesn't mean it's a new invention.

What is the universal standard for IM again, the one where it doesn't matter what phone I have?

kapil
The Kapil
join:2000-04-26
Chicago, IL

kapil

Member

Re: All Your Base...

»en.wikipedia.org/wiki/Xmpp

Matt3
All noise, no signal.
Premium Member
join:2003-07-20
Jamestown, NC

Matt3

Premium Member

Re: All Your Base...

Not quite. You still have to subscribe to the chat "service" or know what the person's address at a competing chat service is, even if they are compatible or make use of the XMPP protocol. With SMS, it doesn't matter what wireless provider they are on, you just need to know their phone number.

IM has a long way to go before it will overtake SMS.

rsmith7
Premium Member
join:2003-03-11
San Diego, CA

rsmith7

Premium Member

Stupid SMS

I think in my five years of smart phones, maybe the phone company has received about $3.00 in donations towards SMS messages. The thought that I have to pay for access to this sideband channel the phone company used in the past is ludicrous.

Go IM, BB messanger, iMessage and Google Voice.

n2jtx
join:2001-01-13
Glen Head, NY

n2jtx

Member

Said No to SMS

Back when various lawsuits over SMS charges forced T-Mobile to offer SMS blocking, I took it. Never had a use for it as I had been using IM almost exclusively. Occasionally I would get an SMS from a family member and that would cost $.20 to receive and $.20 to reply. Now not only do I still us IM but also the free texting services such as TextFree.us and TextPlus. I cannot do short codes but I do not really care.

Of course the carriers can protect the cash cow by mandating that all plans MUST carry an SMS bucket and require you to pay for it. They can still advertise voice plans such as:

Only $29.99* a month for 1000 minutes voice!

* minimum 400 message SMS bundle required at $10/month plus taxes, fees and executive bonus fund charges.

AlexNYC
join:2001-06-02
Edwards, CO

AlexNYC

Member

SMS is a ripoff

At 20c to 25c each this a complete cash grab and a total ripoff. Sure you can get a monthly plan, but compared to the amount of data transfered it is still way too unreasonable. RIP SMS!
QLR
join:2009-06-23
Tallahassee, FL

QLR

Member

oh really...

On Verizon feature phones and T-Mobile prepaid phones, the use of the built in IM on the phone incurs message fees (or use of the appropriate bucket). If I download an app that uses IM over data, then no messaging use apply.

Dryvlyne
Far Beyond Driven
Premium Member
join:2004-08-30
Newark, OH

Dryvlyne

Premium Member

Doesn't matter

It doesn't really matter if the SMS cash cow is even dying because "carriers are anticipating this lost revenue by killing off unlimited data plans and lowering the caps and pushing per byte overages."

So basically if it does indeed die off then the carriers already have a backup plan in place and if it doesn't die off then they can continue to have their cake & eat it to by continuing to charge for it separately from data.
chances14
join:2010-03-03
Michigan

chances14

Member

Re: Doesn't matter

said by Dryvlyne:

It doesn't really matter if the SMS cash cow is even dying because "carriers are anticipating this lost revenue by killing off unlimited data plans and lowering the caps and pushing per byte overages."

So basically if it does indeed die off then the carriers already have a backup plan in place and if it doesn't die off then they can continue to have their cake & eat it to by continuing to charge for it separately from data.

yup it's a win win for the carrier and a lose lose for the consumer. like always....
CharlesH1
join:2011-04-29
Milpitas, CA

CharlesH1

Member

Re: Doesn't matter

SMS is not data traffic. It is a message stuffed into the same control channel that is used to signal incoming voice calls and other network-related things. It is much more efficient for the carrier than application data, which requires a ton of overhead to set up an actual data call (comparable to a voice call). SMS is always in its own pool and and not billed as data.
Joe12345678
join:2003-07-22
Des Plaines, IL

Joe12345678 to Dryvlyne

Member

to Dryvlyne
the plans where not unlimited any ways.

scott2020
join:2008-07-20
MO

scott2020 to Dryvlyne

Member

to Dryvlyne
True, and it will get worse when they start charging per-application using software to detect what is being sent inside the data. They'll charge more for IM traffic, Video traffic, etc, as has been mentioned here in the past.

FastiBook
join:2003-01-08
Newtown, PA

FastiBook

Member

Unlimited messaging...

For one dollar a month.

- A
tmc8080
join:2004-04-24
Brooklyn, NY

tmc8080

Member

stupid people

paying 25 cents per text is just about as stupid as a dumb stump.
BiggA
Premium Member
join:2005-11-23
Central CT

BiggA

Premium Member

Not gonna happen

People still need a universal way to text, and IP services are not nearly as reliable as the control channel of a circuit-switched network.

pnjunction
Teksavvy Extreme
Premium Member
join:2008-01-24
Toronto, ON

pnjunction

Premium Member

Re: Not gonna happen

Right well better tell the engineers designing and implementing LTE networks to get back to the drawing board then? It's all packet-switched IP.

The pricing of SMS that is even more like data will just be even more of a farce.
BiggA
Premium Member
join:2005-11-23
Central CT
·Frontier FiberOp..
Asus RT-AC68

BiggA

Premium Member

Re: Not gonna happen

I doubt we're going to see all-IP for a long, long time. I predict CDMA and UMTS will still be carrying voice in 20 years. This VoLTE stuff just doesn't sound like it's going to work right off the bat. No other VoIP has provided the same reliability as circuit switched voice, even if some implementations, like Skype can sometimes produce spectacular results.

gigahurtz
Premium Member
join:2001-10-20
USA

gigahurtz

Premium Member

AT&T has taken a different approach.

They require you to have unlimited SMS to receive the unlimited mobile to any mobile plan. To some this may not matter, but to me and the 5 lines I have on my account, this unlimited mobile to any mobile comes in handy since we talk to people on Sprint, Verizon and T-Mobile quite often.

If I drop the unlimited texting, I would end up having to raise my minute plan.

I also wish Google Voice would allow MMS already