“Growth in the volume of text messaging is slowing sharply, just as new threats emerge to that lucrative source of wireless carrier profits,” Anton Troianovski reports for The Wall Street Journal.
“While U.S. cellphone users sent and received more than 1 trillion texts in the second half of 2010, according to CTIA, a wireless industry trade group, that was just an 8.7% increase from the prior six months. It was the slimmest gain since texting exploded last decade,” Troianovski reports. “Text traffic will come under more pressure in the months ahead. This week, Apple Inc. showed off an application [iMessage] that will allow iPhone and iPad owners to bypass carriers and send text messages over the Internet to other people with Apple devices.”
“Carriers, such as AT&T Inc. and Verizon Wireless, charge fees ranging from 20 cents per text to $20 a month for unlimited texting. The texting business has low costs and high margins. A dollar of texting revenue produces at least 80 cents of profit compared with about 35 cents of profit from $1 in wireless data or voice services, according to analysts at UBS,” Troianovski reports. “‘It’s not cool anymore to SMS,’ Eelco Blok, chief executive of Dutch telecommunications company Royal KPN NV, acknowledged on an April earnings call.”
Troianovski reports, “In the U.S., carriers are contending with subscribers like Hadi Mulhem, a 27-year-old New York City beer vendor and iPhone owner who says he texts more than he talks and would welcome the chance to lower his bill by using Apple’s iMessage. ‘If I’m able to use it and not pay $20 a month, then of course I will,’ Mr. Mulhem said.”
Read more in the full article here.
Good. I hope they choke on red ink. Text messaging is the most horribly overpriced bandwidth there is.
The only thing slowing the growth of text messaging IS the carriers THEMSELVES!!! $0.20/message is criminal! Fuck them! Hope Apple’s iMessage, Textie & the like take the f*ckers down!
You said it! For what it costs the freaking carriers, they should be providing FREE texting with every data plan.
Text SMS messaging is too expensive. It’s a cash cow, like soda pop or inkjet ink. Way over priced because there was no competition. It’s about time someone integrated a free way to send texts.
Texting should have been free all along. The excuse that service providers have or need special expesive resouces to make it work, is the same as a water company saying they need to use reverse osmosis and conversion of water into itls elemental components and recombining it back into H2O before delivering it to you and that’s why it costs so much.
Totally stupid.
True we have been ripped and it’s a welcome and long overdue shift, but the consumer will more than likely still be picking up the tab. One example could be when LTE goes mainstream they may just end up charging even more for it to make up for their losses. As well as the end of unlimited data. We are still paying for it.
Space scientist finds texting is 4x more expensive than downloading data from the Hubble Space Telescope:
http://www.physorg.com/news129793047.html
3 year old article..
read the above:
“The texting business has low costs and high margins. A dollar of texting revenue produces at least 80 cents of profit compared with about 35 cents of profit from $1 in wireless data or voice services”
not standing up for carrier fees on sms here.. i agree it’s overpriced. but dead? hardly..
I personally get a 25% discount on my “service” so my unlimited plan is only $15, but still it should be less.
I haven’t paid for texting in about 3 years. I got sick of being charged for incoming and outgoing texts, so I blocked them completely. Now I use TextFree on my iPhone to completely avoid texting charges, but still be able to text on occasion.
I’m sure they will survive. I remember when long distance phone calls were around a dollar a minute. The carriers somehow managed to carry on as the per minute cost decreased tremendously over the years. Whether it’s bundling services or something else, they will get their revenues.
Al, I remember that well myself. Long distance calls were a big costly deal. Then along came the first cellphones. Another big costly deal. Several bucks per call. Long distant calls were made only if it was important. Cellphone calls were similar, kept short and only when used rarely. But today I have 4 iPhones on my account and our monthly bill is north of $8 a day. Nearly $250 a month. How did we get from worrying about paying for a few $5 calls rarely to paying the equivalent of 50 long distance calls monthly. And just thinking it is a necessity.
I still cannot understand one thing. An average price, with one of the big four carriers in the US (VZ, Sprint, AT&T, T-mobile) for the least expensive smartphone plan is around $55, plus taxes, surcharges and fees, which ends up around $65. Let us assume that some $15 of that represents the phone subsidy. This means that their basic, cheapest monthly plan (approx. some 500 minutes, 200 MB of data an NO TEXT) costs over $50 per month. How can carriers like Virgin Mobile offer their services for $250 (with 300 minutes and UNLIMITED text and data)???
I keep trying to figure this one out; first, how do they do it and still stay in business, second, how come people are happy to pay twice as much for the same (even worse) level of service?
Or you may need to think different and ask “Why does everybody else charge so much?”
Damn that typo…! Virgin Mobile plan is $25 per month (unlimited data/text, 300 minutes). No contract, no subsidy, cheap (rather crappy) smartphone (LG Optimus — android).
Contractual discount from carrier, i’d suppose…
Much like the steep hotel room discounts incessantly advertised on TV
Not sure if this is related, but Virgin Mobile is also the carrier for a big public service “free cell phones for low income folks” program known as Assurance Wireless. I’m guessing they are collecting a big slice of government pork for that.
as with everything change comes. Good for i messaging. screw you A T & T
when texting dies out they will just up the cost of the data plan.
A smart carrier would look at this trend, and do what they can to get out ahead of it. Perhaps just $5/month more for unlimited texting? Imagine the killing they’d make with people switching from other carriers for a deal like that.
Eventually, of course, texting will be included for “free” with a data plan, as it should be. In the meantime, a smart carrier could still make money on a cheap “unlimited texting” plan, while the money’s still there to be made.
text messaging is a fad like CB Radio was in the 80’s.
i would not be surprised if iMessage would help increase the amount of SMS messages sent.
Sure, iOS to iOS messaging will reduce, but the way SMS is integrated, and the increase of smart phones with other OSses on them may just generate amboost on messaging helping the telecom providers increasing their ridiculous profit.
Wait, what? You guys have to pay for texting? In Europe it’s just an included extra, even on pre-pay phones.
Stop your bitching. Text messaging is priced much like voice calls were 10-15 years ago because it’s the new thing. We’ve already seen unlimited text messaging for lower monthly rates.
The fact is you can only text so much before it’s more convenient to call someone. That will never change.
List of biggest ripp-offs scams in tech…
1. Texting
2. HDMI Cables (some as much as $250+)
3. Cable TV
care to add….
I don’t know about you but I rarely watch tv. I probobly only watch about 10 hrs each month. If I want to wach or hear about the news, I go to the Internet and read. If I want to watch a movie netflix is the place. I do have cable but I’ll be honest, I can live without it. So I agree cable bills are eating my salary.
Go to Cablestogo.com. Their cables are of very good quality and do not cost much compared to monster. No, I do not work for them by I like the company.
2nd cables to go. but i tend to get them off amazon.
I just bought a 10 ft DVI dual link cable for $13. Bestbuy wanted $40 for the cheapest they had… and it was a 6 foot single link.
3rd for cablestogo.
Bought some unique cables for my credit card/sig pad combo. I ordered the right thing, but someone had labeled them incorrectly at the warehouse. Cablestog sent out replacements even before I could pack up the wrong ones to send back. No questions asked.
Great people.
Not connected, but own my own pharmacy.
I bought 3 HDMI cables off Amazon for 21$ TOTAL three years ago and havent had an issue with any of them.
“Text messaging dying?”
Maybe people are just getting tired of the fad.
I mean really… what is that makes texting so popular? You want/need to communicate with somebody?
For cryin’ out loud just call them and talk. It is actually easier and takes lees time.
Texting… the most mind numbing example of mass stupidity I have witnessed in my entire life.
Next to the constant re-election of congressional clowns… I mean representatives… over and over for decades.
I mean really… what is that makes texting so popular?
Teenagers.
No, seriously, that’s about it. Oh sure, just about everyone sends a few texts from time to time. But the high volume users? They’re teenagers.
And really, this is the way it’s always been. Teenagers love to talk. And talk. And talk. And talk. Turn the clock back 30 years, and the big thing if you were a teen was to have your own phone line. The stereotype of the teenager was someone who was always tying up the phone for hours on end. Then once cellphones became affordable, every teen with the means had to have one so they could gab with their friends no matter where they were.
Teens love texting because it allows them to continue endless conversations with multiple other teens while talking to yet another teen in person.
Texting will only fall out of favor when something better comes along to feed teens’ communication addiction.
——RM
exactly.
but if you read the article, texting in the past 6 months is UP… 8.7%.
but why they are declaring texting dead, is cause thats the lowest gain in 10 years..
texting is still used, and still climbing in use. it just slowed down a little. And i’d be willing to bet, Twitter/Facebook usage is up during same time..
kinda like when politicians whine about budget “cuts” yet they got 100k MORE than they got last year… cause the year prior they got 125k.. it’s not a cut, it’s just not as big of an increase as they had last year.
but teenagers DO text all day long… and are the worst offenders of texting behind the wheel. from 16 up to about mid 20’s, every time you see one behind the wheel… they have a cell phone in the other hand. either typing on it, or constantly checking the screen. annoying.
Oh, I’m well aware of the appeal to teens but, from personal experience, I’ve found people in other age groups (who ought to behave better) are just as bad. Or worse because I have the expectation of obnoxious behavior from teens.
People my age know better. Technology doesn’t excuse or make rude behavior less rude.
And I’m not talking about doing it while being out in public, walking down the street or in the mall or whatever. What people do in those situations is their affair… I don’t care if they text until their thumbs bleed.
I am not so arrogant to believe that total strangers (or anyone) in those circumstances owe me any attention, except what’s necessary to avoid bumping into me.
No… what’s unfreaking rude is when people are visiting me, supposedly to socialize with me or my family at my home, or their home, or wherever, and they decide to take time away from that to repeatedly text with another party.
Emergencies are one thing, this is something else.
This no less rude (and I would say that texting is even more rude) than a live social situation in which person Z (that only one person A knows) intrudes on person A (and any other people having a conversation with A)… and person A decides to ignore everyone else in order to talk to person Z.
Z isn’t anywhere near as rude as A.
If you’re visiting me, then visit with me. Don’t engage in behavior that tells me you find me boring. If you find me boring, then I prefer you don’t waste your time (or more importantly, MINE) by coming around… only to ignore me.
If you have to interrupt a social engagement with me to get involved in non-emergecy, casual chit-chat with any Tom, Dick or Harry that can’t stop twiddling their thumbs, then leave.
Get those conversations over with and the situations straighten out, and don’t return until you have learned to prioritize your social engagements, and can give each it’s appropriate undivided attention.
A sibling and a good friend have both done this (the continuous receiving and sending texts) while visiting and I bit my tongue to avoid hurting their feelings.
But I’ve decided during writing this that isn’t going to fly anymore. Enough is enough. I’m not going to avoid offending anyone just to allow them to offend me. If they don’t want to come around, then I have to presume (from their texting) that they weren’t interested anyway.
total agreement.
I’m a contractor, I use texting to my crews to send them phone #s for subs, permit numbers, address’s etc. And they text me their hours.
Texting is a total ripoff.
I refuse to pay 25¢ a pop to send AND receive.
Solution?
I blocked texting.
i rarely text (cuz I hate the idea of paying 20 cents or so per a 5 worded message so I email more than text. Can’t wait for message to come out.
Also, I have a friend who has an app on her iPod touch that allows her to text for free so I think those apps have been hurting the profits of carriers longer than we think.
Oh. Cuz people are just talking via their Facebook apps and MSN-ing, etc?
Darn that free market – it’s going to drive the price of text messaging down! We need immediate government intervention to ensure that the price of text messaging stays ridiculously high! Eliminate free markets!! Eliminate capitalism!! Who’s with me?
Texting kills your marriage…:))
Texting causes cancer. And chicken pox. Also homelessness.
Wait, what? In the US you pay to RECEIVE a call or a text message? Boy, are you behind the curve…
Evidence of ineffective regulation of the “free” market. What ever the US may have been at the end of WWII, that’s all gone.
I jailbreak’d my original iPhone a couple years ago because I was sick of AT&T. Recently considered going back to them until I saw they only offered two options. No text plan for $.20 per text or $20 for unlimited.
Once I saw that I just closed the ordering window. Complete fing ripoff.
there’s more than 2 options. unless AT&T changed that..
and look into the service discounts. you can get a decent discount on service if you belong to certain groups, like AARP for my parents, i think 15% discount on service.
I have a government discount that gets me 25% on service, and 50% (yes, thats half off..) on accessories.
I know you can go into any AT&T store and they will let you go through the book they have to see if you qualify for any discounts, have to show proof before the discount applies.
I bet you can find it online also.
the $20 option, has more than just text though, also includes unlimited mobile to mobile minutes. calling any mobile number doesn’t count against your minutes for the month, regardless of the carrier. a Plus.
I wish it would die. Rather have that then people texting while they drive killing others.
yeah cause killing Text messages will ALSO prevent people from typing in Twitter, Facebook, Any chat program, E-Mail etc while driving.
it’s ALL SMS’s fault…. ban SMS and typing while driving will 100% stop…..
I think you need to rethink your argument.