Messaging Apps, VoIP Already Eating Into Carrier Revenue 225
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."
Google Voice and GrooveIP (Score:4, Interesting)
Re:The funny part (Score:5, Interesting)
Considering that SMS uses the same packet radio features that cellular networks use to keep the network appraised of where the phone is, and that packet size is much larger than the data that is transmitted per packet requiring the packets to be buffered out with null data, and that fitting the SMS messages just fill the rest of the packet that has to be transmitted anyway, even charging for SMS messaging is a crock.
I can understand charging for image or audio messages, as those actually do impact the use of the network. Charging for SMS, though, that's just sheer greed.
My wife and I got unlimited minutes cell plans when they were novel and first introduced to long-term customers several years ago, and we didn't get any SMS or data for her since she doesn't have a smartphone. Consequently, we used voice airtime even when SMS would have worked, as we didn't want to pay $0.20 for less than 300 characters. Because the carrier is greedy it actually cost them more for us to be customers.
I also believe that data features on smartphones that are provided by the carrier and OS on the phone, like e-mail, directory services, map data, and other non-web, fairly low-bandwidth data services should be complimentary with the purchase of the data plan, and should subsequently not count against one's 2gb cap or whatever the cap may be. But, apparently cell companies right now don't agree with me.
When I travelled overseas I found cellphones to be a much better deal. That they cost so much here for what one gets compared to overseas where they have the hell regulated out of them means to me that letting companies operate as they will, with contracts to the users, carrier-locked phones, and more than a single network standard further preventing even unlocked devices from conveniently switching between some carriers to be BS.
SMS at Hubble data rates (Score:5, Interesting)
And this is the REAL reason for Data caps -at home (Score:4, Interesting)
1-Imagine if people could get unlimited data plan not for their Smartphone but at home.
2-Imagine if many (not most or all) people offered limited but free WIFI to Cell phones. (Don't ask how, just follow me on this)
3-Few people would need a data plan at all on their SmartPhones
4-Cell phone providers would have to lower their rates or die.
However, with great corruption comes draconian laws.
Therefore, cell phone providers have little to fear.
Re:Who cares? (Score:5, Interesting)
For years the American Consumer has been saying "We want to pay the same amount every month for a service, worry-free about overages. We want predictability. We want to be able to budget and plan ahead." It makes sense, right? But for some reason, we can hand these companies over a fairly large sum, more than we'd pay if we really fine-tuned our service preferences, and they'll still want more out of us. The SMS thing, in particular, kills me just on the grounds that we are just handing them over pure profit. Yet they still keep upping the prices on it.
I was really happy to see people stand up and tell the banks NO to the debit card fees. I can't help but hope that we start stepping up more to fight all this nickel-and-diming. I think it's time for me to start putting a little more energy into doing just that. I recently had a problem where Time Warner would call me every few months to offer me digital phone service. Each time I'd tell them to stop calling me. I had to spend an hour on the phone one night to finally nail that down for good. (To their credit, it has been almost a year and not even an advert has come through the mail.) But... if they do, I'm dropping one of my premium services. I like HBO, but I don't really need it. I'm wiling to bet if other people started removing upsells from their services these companies might settle down a bit.
Re:The funny part (Score:5, Interesting)
SMS is technically free. The only cost is counting/bill.
If you consider only the radio spectrum involved in delivery, you could make that argument.
But the messages have to be routed, handed off to other carriers, stored and forwarded, etc. This has a real cost, even if the last mile imposes no additional burden on the cell tower.
Further, you must amortize your network, every switch, tower, transmitter, fiber optic. You spread these costs over every service you provide. If people dropped their voice plans and kept only their sms plans, you STILL end up having to maintain the same towers, networks, and switching centers.
So SMS messages are essentially free as long as you look ONLY at that segment of open air between the tower an your phone.
That being said, the rate charged for these things are beyond all measure of the actual costs. I'm not defending the pricing.
I'm simply calling into question the rather myopic view that they come down the same pre-existing signaling channel and are therefore free.