Text messaging dying? Sharply slowing growth worries carriers

“During 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 in accordance with 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, just 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 until further notice 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 revenues 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, at that time of course I will,’ Mr. Mulhem said.”

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!

3 year old article..read the above:“The texting business has low costs and high margins. A dollar of texting revenue produces meanwhile 80 cents of profit compared with about 35 cents of profit from $1 in wireless data or voice services”

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, nevertheless still be able to text once in a while.

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 earnings.

Al, I remember that so then myself. Long distance calls were a big costly deal. At the time 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. However today I have 4 iPhones on my account and our monthly bill is north of $8 a day. Near $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 for all that cannot understand one thing. An average price, with one of the big four carriers in the US 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 costs over $50 per month. How can carriers like Virgin Mobile offer their services for $250???

I keep trying to figure this one out; first, how do they do it and after all stay in business, second, how come people are happy to pay twice as much for the same level of service?

Damn that typo…! Virgin Mobile plan is $25 per month. No contract, no subsidy, cheap smartphone.

Not sure if this is related, however Virgin Mobile is as well 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.

i would not be surprised if iMessage would help increase the amount of SMS messages sent.Sure, iOS to iOS messaging will reduce, however 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.

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.

I don’t know about you nevertheless 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 yet I’ll be honest, I can live without it. So I agree cable bills are eating my salary.

And in effect, 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. At the time 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.

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.