Study Shows Social Messaging Apps Cost Carriers $13.9 Billion in SMS Revenues Last Year

A study carried out by Analysis firm Ovum has revealed that messaging apps like WhatsApp, Facebook (Messenger) may have cost carriers $13.9 billion in lost SMS revenues in 2011.

Ovum studied data gathered from the popular messaging applications that are available on smartphones.

The result of the study is not surprising as last year has seen an influx of messenger apps for smartphones. WhatsApp – a cross-platform messenger have been extremely popular. Apple also launched iMessage – their new messaging service in October that allows iOS device users to send messages to each other for free. Apple released Message Beta for Mac users last week and plans to include it as a major feature in OS X Mountain Lion that will be released to users later this summer. Facebook also surprised everyone by launching Facebook Messenger – a standalone messaging app.

So users have ended up using these messaging and social networking apps that use iPhone’s data connection or Wi-Fi networks to communicate with their friends and family rather than using SMS.

Ovum consumer analyst Neha Dharia said yesterday in a statement that “Social messaging has disrupted traditional services, and operators’ revenues in this area will come under increasing pressure.”

She believes that carriers should be open to work with big players in the social messaging space.

“Operators must remain open to partnering with app developers, sharing end-user data with them and allowing integration with the user’s social connections.

Working closely with handset vendors will also be important; they control some of the most popular social messaging apps, and can also provide preloaded applications.”

While that may work with Android based smartphones, that strategy won’t work with with iOS devices as Apple has control (thankfully) over what is installed on them.

In 2010, carriers had lost $8.7 billion because of messaging apps, which was 6% of the total text messaging revenues, which has jumped to 9% in 2011. That should be a worrying trend for carriers, however we’re not sure if they can do anything about it.

Has services like iMessage reduced your monthly bill? Let us know in the comments.

[via BBC]

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  • Steveo

    Yep. I’ve only ever had the $5/200 text plan with AT&T. I mostly use Google Voice & iMessage for texting. AT&T charges WAY TOO MUCH for texting, so I won’t support that.

    • Olaf

      LOL I still have the same $5 plan.
      I started telling my friends that if they had a smartphone, either call me or use some sort of IM app to chat with me. I refuse to pay AT&T another dime, especially seeing that now they only offer one option for a plan – $20 unlimited texting. EFF THAT!! I’m already paying enough for data. Why the hell would I want to give them an additional $15 for unlimited texting?
      AT&T, suck it!!

      • SeenDaLight

        BRAVO !!!

    • elgine

      I did the same i stopped my text, i only use Google voice and iMessage, i dont like att, am trying to switch all my business to other companies, even my DSL service

  • MrEvil186

    Don’t worry, because the carriers are raping use with these data charges. Is there an app where I can get free data? LoL

  • Ashbel

    Yes… $30 less in my att monthly bill 🙂
    F..K ATT !!!!

  • Brian

    Well SH?T !!!! That just means the carriers, especially AT&T will raise the rates. They have already raised the upgrade fees.

  • Boomerang

    I dropped AT&T messaging plan like 2 years now, from I discovered text free. I used to have the $30.00 family plan. Thanks to text free that no more. I also used google voice and whatsapp. So fuuuuck u AT&T. Greedy bastards.

  • Chris Flowers

    Oh boo hoo. The poor carriers. Purr-lease. They more then make up for that loss by charging extortionate rates for data.

  • Jonathan Delafield

    Well yeah … that’s the free market working. The carriers charge way too much for SMS, so users found another way. That’s not $13.9B lost. That demand would never have been there if carriers had a monopoly.

  • MOY


  • drexx

    SMS costs next to nothing for a carrier to send out, it piggy backs off your non-data portion that is used to make phone calls. You can still send texts when you have no Edge, 3G, or 4G. This nearly 14 billion in “losses” are a joke, more like they tried to rip us off for 14 billion and the market is evolving to where the average user doesn’t need to be aware that they are getting ripped off for SMS, they just know that there are frugal alternatives.

    • Kraken

      Exactly right. I hate it when pro-corporate articles whine about how some company “lost” revenue. No, they ripped off their costumers for well over 13.9 billion dollars a year, and now some of the smarter folks aren’t getting ripped off as much.

      Next they will be crying for (more) subsidies because 4000% profit on SMS isn’t enough.

  • Sb

    I know almost everyone I know either has an iphone with iMessage or uses an app for texting like GV. so no texting plan here

  • fas

    Imaging, how much the customers saved!

  • SeattleMobster

    Had the carriers not artificially inflated the charges for these services into the stratosphere in the first place, many of these services would never have had a chance at getting popular. In essence, the carriers f-ed themselves out of that revenue.

  • Chris Williams

    Honestly it doen’t bother me to pay for SMS sometimes because not everyone’s gonna have an iPhone & not everyone’s gonna use iMessage mainly because most don’t know how to use it.

  • Thor

    $5 AT&T plan and use GV and GV SMS extension. I have mms when I need it. If they ever try to force a more expensive plan, I will just drop the service. Don’t really need mms anyway.

  • Joe

    I’ve never had texting on any phone. The lame part is that there is no way to turn off reception so I have to pay any time somebody sends one to me, but I either don’t respond or I respond from google voice and most people use my GV number directly. In the end I probably get 3 SMSs/month so it’s better than the $5 plan.

  • bigfodee

    I have never paid for texting. I don’t use (or need) texting. If you want me, call me or send me an e-mail.
    iMessage is nice if everyone had iPhones. I tried a few times using google voice, but it was a hassle, I just call people.

    Carriers have been screwing customers for years with these texting plans that cost them pennies a month.

  • Sherman

    Booo .. Now the carriers here in the US are crying foul. People don’t seem to realize that we are amongst the most ripped off in the world !!!!
    I can get an unlimited prepaid plan I.e. in Germany for € 10 = $ 13.30 a month.
    SMS ist a free byproduct that costs the carriers NOTHING.
    Very unfortunate that there is no real competition in the GSM field here. So AT&T can stick it to us. Unlike in the rest of the world where GSM rules and therefor the competition.

  • Travis

    The title should read “Study Shows Social Messaging Apps Saved Users $13.9 Billion”.

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