SMS or app: How do you message your contacts?

November 22, 2014 Vanessa Kenworthy
 
mobile messaging

Informa Telecoms and Media is forecasting slower growth or a small decline in SMS (short messaging service) revenues over the next five years, but say that the compound annual growth rate will be 3%. Carriers are expected to generate $722.7 billion in SMS profits during this time. A report in February 2012 by analysis firm Ovum claims that network operators lost $13.9 billion in 2011 to mobile messaging apps.

With the advent of apps such as Google Talk, Meebo, and Trillian to name a few, you can message your friends for free in some cases or at least for a small, one-time fee provided you have Internet access. Carriers charge a monthly or a per-item fee for text messaging and most avid texters are paying between $20-$25 per month for unlimited texting. In comparison, Google Talk, Meebo, and Blackberry Messenger are free apps, Trillian is $4.99, and Beejive is $9.99. These are all free or low-cost alternatives to paid SMS, so why the continuous growth for SMS revenues?

SMS texting was introduced in the mid 90’s, but there was a slow uptake. Many were skeptical to adopt this new technology, but only a decade later it is the most widely-used mobile service with 74% of users accessing text messaging daily. The increase in recent smartphone adoption has put more messaging options before us, so why are you still paying your carriers recurring monthly fees for SMS?

Data packages. They are expensive and only going to increase over time as it is a hot commodity. It has become necessary for us to remain connected no matter where we are and if the apps available to make our daily lives easier, then we will pay the exorbitant fees and the carriers know this. In addition, company cell phone usage has steadily increased over the years and many companies now provide their employees with smartphones and a data package. Using a mobile messaging app will increase data usage, while SMS is sent without that connection.

The bottom line: we’re going to have to pay for it somewhere. If you are a heavy data user, then you may not want to expend additional data usage on messaging, but if you have that extra room on your data plan, you may want to decrease your SMS plan and save some money. It’s probably not a great idea to get rid of your SMS plan altogether, because no matter how many times you tell people you aren’t using SMS, it never fails that a few people will forget and you’ll have that per-text charge that can add up throughout the month to make for a nasty bill.

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