Messaging Apps, VoIP Already Eating Into Carrier Revenue

An anonymous reader writes "A new breed of messaging services and mobile Voice over IP clients like Skype are already eating into carrier revenues according to a new study. '... one-third of carriers are already seeing voice traffic and SMS revenue decline as a result of the increased popularity of third-party solutions. ... For years, Research In Motion’s BlackBerry Messenger service has been one of the top features consumers and enterprise users loved about BlackBerry devices. It took much longer than some expected, but other vendors and third-party developers have finally come out in full force with competing services that provide SMS-like messaging over data networks at little or no cost to the user."

Re:The funny part

[Anonymous Coward]

SMS is technically free. The only cost is counting/bill.

Re:TextFree+Voice

[MobileTatsu-NJG]

All the solutions I'm aware of lack Picture Capability...

iOS 5's iMessage supports sending of photos and videos. Chances are I won't have an SMS plan much longer.

Re:Good for several reasons

[TWX]

I thought the whole point was that SMS uses the remainder of the defined packet size that's otherwise filled with null characters because of the nature of the packet sizes that were chosen when this kind of radio communication was implemented... In short, SMS costs nothing when the data is already being transmitted OTA anyway...

Re:Good for several reasons

[alexandre_ganso]

There IS NO channel load for SMS. Every time you phone says "hello, I'm here", it receives an equivalent of an ACK with SMS WITHIN THE SAME PACKET.

So you can receive as many sms as times as your network knows in which antenna you are, without using a single extra byte from them, because that would be zero-filled otherwise.

If there is such a thing as an immense scam right now, it is SMS.

They just add data plans to make up for it!

[cs668]

T-Mobile added a per MB data plan to my service when I specifically set up my plan 2 years ago to have no data component. I told them that I did not what my phone to be able to access the Internet and surprise me with charges. Everything was fine until me last bill, when I had $40 of data charges. They had added an on demand data plan to my service and like any good smart phone when it couldn't get wifi it went ahead and used the mobile carrier, and racked up a big bill. I think that is their way of upping revenue.

Re:Prices go up, usage goes down?

[jeffmeden]

So shortly after all of the major carriers dropped the even slightly reasonable SMS plans, people started using the hacky but free alternatives? What a shocker. This seems like a classic example of what happens when you price yourself right out of the market.

If you want to see Price Discrimination at work, check out the prices on Mobile Virtual Network Operators (companies that buy access to Verizon, ATT, Sprint, etc. in bulk and resell it via subscription or prepaid contracts.) MVNO carriers offer basically the exact same coverage footprint, you can use the exact same set of handsets (but without a contract, the prices are obviously much different) and yet a MVNO will charge you at least *half*, if not less, for the exact same number of minutes, text messages, and data. Why more people don't use them instead of continuing to be extorted by the big carriers is beyond explanation. If gas cost half as much but you had to pump it yourself (oh, wait) how many people would ever go to full-serve filling stations?

Re:SMS at Hubble data rates

[what2123]

I remembered this also and had to go find it; http://science.slashdot.org/story/08/05/12/1419204/sms-4x-more-expensive-than-data-from-hubble [slashdot.org]

Re:The funny part

[linuxwolf69]

But don't they have to do all of this to be able to make calls anyway? The only difference being that SMS could be sent out more frequently than calls, thus causing slightly more handing off to other carriers.

Also, I've never heard of an SMS only plan. I think the argument here is that since all of this connectivity must be maintained for the Voice network, why are we paying so much for the SMS, which essentially costs a very small amount of cost on the provider's end when looking at the fact that all of their infrastructure and interconnectivity is needed for the voice portion of the service? That's what GP means by "technically free".

Re:iMessage

[shutdown -p now]

Thing is, Apple could easily run this infrastructure in an open way - say, as a federated XMPP server - and just publish an open extension that lets you figure out if the sender (defined by his phone number) is signed up for that infrastructure or not. Then it'd all work just as transparently as iMessage does today, but for all phones that would implement this system.

Unfortunately, it seems that their solution is restricted to their ecosystem - even if Google wanted to, say, run their own servers to do the same for Android, they couldn't interoperate with iPhones. That sucks.