BBC News: Social messaging apps 'lost networks $13.9bn in 2011'

NFH

http://www.bbc.co.uk/news/technology-17111044

Tony5101

I think that is quite a good article, but it really only paints one part of the picture. (ie networks "losing" xxxx amount)
I would think that most people (certainly in the UK) will have some sort of text inclusive tariff - so I think it's extremely difficult to prove that the networks are losing money.
I would have said quite the opposite actually - with people either being 'text inclusive', or buying text bundles - the networks get their money up-front. And certainly in the case of text-bundles...how many of those go fully un-utilised. This is further compounded by the fact that the actual cost vs the charged cost of texting is vastly different.
I also note - they forgot about the additional revenue earned by hugely increased data usage.

Good basis for an article, but sadly appears to be factually lacking. (from a UK perspective)

NFH

Tony5101 wrote: »

I would think that most people (certainly in the UK) will have some sort of text inclusive tariff - so I think it's extremely difficult to prove that the networks are losing money.

I am currently on an expensive iPhone tariff with unlimited texts, but I'll soon be switching to a £9/month Orange tariff with 150 texts because nearly all of my contacts are on iMessage and/or WhatsApp. An unlimited SMS bundle is no longer necessary. Orange is losing money in this case.

Tony5101 wrote: »

I also note - they forgot about the additional revenue earned by hugely increased data usage.

On the contrary, the article did specifically say "However, the study did not factor in the extra income networks received from mobile data costs because of increased internet usage resulting from social messaging."

victor2

Changing times. SMS has had its big day and social media is taking over - handled by the same networks that handled the SMS traffic. They're not losing out, the smart ones are changing focus to earn from people using data.

Tony5101

NFH wrote: »

I am currently on an expensive iPhone tariff with unlimited texts, but I'll soon be switching to a £9/month Orange tariff with 150 texts because nearly all of my contacts are on iMessage and/or WhatsApp. An unlimited SMS bundle is no longer necessary. Orange is losing money in this case.

I see your point in the loss of revenue from the tariff overall...but out of that overall amount, how much are they losing from you in respect of SMS only? Surely if you're moving from "unlimited" to only 150, then your usage of "unlimited" must be pretty small already? The cost of providing "unlimited SMS" is already factored into the tariff to make your provider money - if you're not using it's potential - surely - they win?

NFH wrote: »

On the contrary, the article did specifically say "However, the study did not factor in the extra income networks received from mobile data costs because of increased internet usage resulting from social messaging."

Badly worded reply from me - again..referring to a balanced article, they don't mention the specific sums of money gained overall by people using data. (vs. alleged loss from SMS)

I'm wondering how they arrived at that sum of $loss...wonder if they simply used the amount of SMS x consumer cost // rather than being a little more accurate
Suppose it's a good headliner for a sympathy vote....

NFH

Tony5101 wrote: »

Surely if you're moving from "unlimited" to only 150, then your usage of "unlimited" must be pretty small already? The cost of providing "unlimited SMS" is already factored into the tariff to make your provider money - if you're not using it's potential - surely - they win?

Previously I was sending hundreds of SMS per month, but this has dropped to 50 to 60 per month since iMessage was launched and many of my contacts got WhatsApp.

drbesty

The cost to a mobile network of you sending an SMS is practically nothing, an unlimited SMS bundle costs a fiver, when I got my first PAYG phone in 1996 SMS were totally free, it's only when mobile networks realised they were sitting on a cash cow that they started charging for them

dealer_wins

SMS must have been a great earner from the networks throughout the late 90s early 2000s. Everyone was sending loads of 10p a time texts.

Still technology moves on, only a matter of time before voice calls all go via the internet.

MattLFC

Most networks include copious amounts of texts within their contract packages nowadays, anyway. o2's smallest package, £8.50 per month, unlimited text. 3 offer 3000 texts on all their packages, which is what o2 define as unlimited. So I don't think the networks are too worried by this.

The thing I like about texts, is no matter who you are or what phone you're using, I send you an SMS and I know you can get it; everything else is app-dependent. I have been using smartphones since long before the "iPhone" generation had even got to grips with WAP or maybe were even old enough to have a phone, (circa 11 years ago), and yet at present, I have no "messaging app" installed. You want to send me a message, you send me a text, or, if I happen to be on Facebook at the time, you can chat to me on there, but otherwise you can't get ahold of me. Everyone I know seems to have no problems with this, but then they are all grown-ups, who have contracts of one sort or another (even those on PayGo seem to have text bundles these days) and have practically unlimited texts built into their contracts.

The only place networks are actually going to be losing money, is on the low-spending (usually skint) PayGo users who don't choose their tariff wisely/don't have a need to topup on a regular basis to become eligible for inclusive texts - which again, I doubt the networks are too interested in as they don't exactly pay the companies bills lol.

Furthermore, just because every other kid nowadays has the Cheapmobile (aka BBM), and they send say, 1000 messages to each other using it, this does not mean that is BBM and the like did not exist, they would pay/subscribe to 1000 SMS per month - because ultimately, their SMS spending habits are dictated to by their parents. Even for older users, the logic does not follow, if something is free, people will abuse it, hammer it to the point of no return; because something is not free, people take more care and use it as and when they need to/can afford to, rather than to excess just for the sake of.

If the government started subsidising the price of fuel, and in effect made it free, or even dirt cheap, people would drive just for the sake of driving. Whilst the price of fuel is high, people drive less and walk more. Just because they do one thing whilst its free, does not mean they do the same when its chargable.

The networks adjusted their SMS packages over time, even before the threat of "messaging apps" and the "iPhone generation" thinking everyone is like them (99% of mobile users do not spend 23.2 hours a day with their phone glued to their hand), the last time I remember getting anything less than 500 SMS on a contract package was back in 2003 iirc with my Nokia 6600; an SMS costs the networks practically nothing to send/receive, if they were that desperate for cash they could still be charging for each message, but they don't. Even in the good old days (1999ish) I remember my "U" tariff from Cellnet (for the iPhone generation, they became BT Cellnet, mmO2 and now o2), the texts were 5p a pop. Then a year later, Genie (BT owned internet provider, BT Cellnet sister service for mobiles with the advent of WAP, a bit like GiffGaff today) launched unlimited WAP access and 300 free SMS per month, just for topping up a tenner a month (and that included being able to use the tenner for calls and SMS). So the iPhone generation really do need to take a step back and realise, we were all used to free messaging long before you knew what the term smartphone meant, and the networks have been using cheap/free messaging as a fantastic marketing tool for many many years now!!