Mobile providers losing mega money as fewer use SMS

February 21st, 2012 11 Comments By Andy Dawson

Bitterwallet SMS message Mobile providers losing mega money as fewer use SMSIt’s time to get the world’s smallest violin out and play a sad little tune on it just for the mobile phone providers – that’s because they lost out on £8.8 BILLION in lost revenue last year.

How can this be? Simple – it’s the money they used to make from SMS messaging charges. Nowadays, with the advent of instant messaging apps like Whatsapp and BlackBerry Messenger, people just aren’t sending as many text messages as they used to, creating a fairly mighty hole in the takings of the Mr Vodafone, Mr Orange, Mr 3 and the like. Boo hoo. Boo hoo.

It might even get worse for them. A survey from April of last year showed that only 4% of smartphone users had used the Whatsapp service that month, while another one from June showed that 81% of smartphone users still considered SMS to be the best way to send messages on a mobile.

It remains to be seen whether the SMS will continue to slowly die and how subtly the mobile providers assimilate the monetary loss that they’ll certainly incur. Probably something to do with charging more for less data.

[BBC]

Comments (11) Jump to most recent comment
  1. Posted by Kevin February 21, 2012 at 2:34 pm

    That doesn’t make sense to me.
    I have a sim-only deal that includes x number of minutes and thousands of texts which is less than I was paying for a full contract for very similar benefits. Unless you are talking about MMS (which you weren’t) I can’t see how they are losing money. Losing money on the way you USED to use SM’S's, in that you paid per number of texts, but how long ago was that?

  2. Posted by MrRobin February 21, 2012 at 2:57 pm

    I agree, Kevin, the last time I paid for an individual SMS was probably about 2002.

    Perhaps it’s different in other countries.

  3. Posted by Christopher Robinson February 21, 2012 at 3:30 pm

    If this had anything to do with UK networks and contracts then the BBC article wouldn’t have a price in $. This can’t apply to contracts as well, if anything the less texts I send the more money the networks make from me.

  4. Posted by Kevin February 21, 2012 at 3:31 pm

    Ah yes, good point. That might explain it.
    The original story says $13.9bn but the end of it mentions UK customers so bit of a mixed message.

  5. Posted by Noghar February 21, 2012 at 4:01 pm

    I learned recently the Yanks are getting royally $crewed by thier networks who still charge ‘em money PER TEXT. That must be what this story refers to. Nobody in the UK pays per text any more do they? I can’t even remember when we did.

  6. Posted by Marc February 21, 2012 at 4:05 pm

    The article probably relates to PAYG customers, who (in some instances) are still paying between 4p/12p per SMS…..

  7. Posted by Dick February 21, 2012 at 4:33 pm

    Be careful, Mr Orange is an undercover cop.

  8. Posted by Inspector Gadget February 21, 2012 at 4:46 pm

    I’m not sure that ‘lost out’ is the correct term. To get BBM and other ‘free’ messages we are all now paying for internet access which no-one was paying for a couple of years ago.

  9. Posted by Boris February 21, 2012 at 6:51 pm

    Is this ‘loss’ calculated the same way as piracy of DVDs; assuming that everybody that sent a free message would have sent a SMS if they were charged 20 cents (as they say in the US). That’s the only logical way in my opinion.

  10. I think the clue is in the 2nd paragraph of the BBC article:
    “Analysis firm Ovum studied global use of popular services like Whatsapp, Blackberry Messenger and Facebook chat.”
    I also think that it’s crap analysis. Just because someone sends a message via BBM or FB chat doesn’t mean they would have sent it by SMS otherwise.

  11. Posted by Spencer February 27, 2012 at 11:54 am

    With apps like Fring and Viber… That make free voice and video calls, conventioanl phone calls are on borrowed time as well…?

    What I dont get however is where this ‘loss’ figure comes from. Even in the U.S… most packages include free texts. The most popular cell package out there is the verizon unlimited plan. Completely free calls, txt and data… and that runs at about £30 a month.

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