Carriers Tweak Plans in Wake of Free Messaging Services

For example, AT&T now offers two texting plans, one unlimited and one pay-per-text, in an effort to give clients cost-effective choices and defend its lucrative texting business from free messaging services.

Consumers increasingly see little point in paying for text messaging and video chatting. As alternative options grow in number and popularity, carriers will likely continue to adjust plans, pricing and services in an effort to maintain a steady revenue stream.

A study, commissioned by mobile LTE (Long Term Evolution, latest standard in the mobile network technology) infrastructure provider Mavenir Systems, interviewed more than 30 wireless carriers worldwide to find one-third experienced a decline in voice traffic and SMS revenue.

Third-party messaging, video and voice services just as Apple's iMessage, Facebook Messenger, Google Voice and Skype increasingly provide free ways for people to communicate on mobile devices, and carriers are finding themselves hard-pressed to compete. Some mobile operators expect their services' usage to drop by more than a third over the then and there decade as free messaging continues to rise in popularity.

Free messaging and VoIP (Voice over Internet Protocol) services transmit instant messages and voice calls over data networks and the Internet, in other words than over the cellular networks carriers use for these services.

The price of text messages

Even although carriers dramatically mark up the price of text messages and are charging more for data plans, free messaging poses a potential threat to their revenue stream. More than two trillion text messages are sent in the U.S. each year, generating more than $20 billion in revenue for wireless carriers.