Is the SMS heading towards a slow death?

Text messages have long given people an easy and relatively cheap way to communicate, but the SMS market might have peaked in a number of countries as other services take the place of the text message.

Forbes reports that the number of texts sent on Christmas Eve in 2011 plunged in Finland, with the country's main mobile carrier, Sonera, sending only 8.5 mn texts, down from 10.9 mn sent the year before. Another Finnish carrier, DNA, saw a smaller decline from 5.9 mn to 5.6 mn. That’s an overall drop of 16 percent in twelve months. In Hong Kong, Christmas Day saw a decline in text messaging of nearly 14 percent, year on year.

Other countries, such as Spain, the Netherlandsand the  Phillipines, also seem to be showing that SMS may have peaked as users switch to social networks and other messaging tools.

 Is the SMS heading towards a slow death?

Reuters

In China, the peak text-sending period is during their New Year, which is coming up and eyes are watching to see whether social network Weibo pushes SMS use down. Says Penn Olson:

SMSes have been booming in China in the past decade, with the total number sent more than tripling from 2003 to 2010. According to Sina Tech, the number sent totaled 7 billion in China in 2003; then it rocketed: 9.8 billion, 11, 12.6, 15.2, 17, 19, and then 23 billion in 2010. But if those numbers are broken down by the exploding number of mobile users in China, the peak was reached in 2007 with 1,180 SMS sent each year per capita. By 2010, it was down to 1,027 SMS sent per person in that one year. So the trend is now one of declining SMS usage in China – it’s just that more mobile subscribers keep coming on board. And so it seems that Weibo and group messaging apps – along, indeed, with older social networks such as QQ IM – are having an influence at the personal level.

The challenge to texting isn’t just coming from social networks like Facebook and Twitter, but also from more specialist services such as WhatsApp, Kik, Touch (previously called PingChat) and even Apple’s own iMessage.

WhatsApp especially is a challenger because it works on iOS, Android, Windows Phone, Blackberry and Symbian, providing the kind of cross-compatibility that SMS has. Indeed, WhatsApp recently passed the 1 bn messages per day milestone, and will undoubtedly continue to grow. For users with a data plan, WhatsApp is a financially economical choice, allowing users to send free messages including unlimited images, video and audio once they have bought the app.

Kik takes messaging a step further, allowing people to send content from an app on their phone to the same app on a friend’s phone, for Kik-enabled apps. The inability to move files around from phone to phone has always been a bit of a pain, but Kik allows the kind of sharing we take for granted on our laptops and desktops.

Globally, SMS volume is still on the up, growing 40 percent in 2010 and likely to hit 30 percent growth in 2011. Users seem quite happy to shift their messaging behaviour from SMS to other services and, indeed, there’s no particular reason why they should stick with SMS. this is particularly true in territories where there’s financial pressure on users to find a cheaper alternative.

Whilst a text in the US might cost around 1¢, in the UK it is more like 10¢ and whilst text cost doesn’t affect those users on contract who have pre-paid for a set number of texts per month, those on pay-as-you-go are much more sensitive to both cost and pricing predicability. Shifting to the up-front cost of buying an app followed by unlimited free message, or even a flat subscription, will be more attractive to users who are currently paying through the nose for their texts.

It would be ironic if texts, which became popular in part because they provided a cheaper and, again, more predictable alternative to phone calls should be usurped by services now offering exactly the same thing.

Updated Date: Jan 06, 2012 16:30:59 IST