Feature Article

December 10, 2012

Text Messaging Drawing Lower Revenue than ever Before

Text messaging has been a way that cellular providers used to make a little extra money from their customers. Parents who give their kids cell phones are often chewing on their fingernails when they think about the bills they are likely to see from text messaging. These days, text messaging is as big as it has ever been. That should be a good thing for cellular providers, but the catch is that more and more mobile applications are finding ways for people to text their friends without having to go through the cellular provider.

The use of text messaging over the Internet has been gaining steam around the world, but has left the United States relatively untouched. It appears that U.S. cellular providers are starting to have to deal with that now and it could be a real concern financially. This particular move is making it harder for companies like Sprint and AT&T to earn a buck from texting, but it has opened up a bigger chunk of the market for companies like Facebook, Apple, WhatsApp and Kik. 

Image via Shutterstock

Peter Deng, who is a product director for Facebook, recently said that the text messaging market is ripe for the picking, because until now it had been held back by technology that was pretty outdated. “It’s limited to 160 characters,” Deng said, “and it’s not at all rich in its expression. People want to connect deeply with each other, and they don’t want to be constrained by various technical boundaries and decisions made 20 years ago.”

Facebook allows people to see when their contacts are typing and when messages are actually read, which is something where normal text messaging falls short. Cellular providers are becoming a little smarter about this shift, with several companies offering up plans that allow for free texting, while blasting up the amount of money they charge for data use. With text messaging falling out of favor, it appears that this is how the companies will adapt.

Edited by Brooke Neuman

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