Here is an article about this topic that argues that Facebook has already lost this arena to Whatsapp.
Wow. According to that WhatsApp is a monster, with over 80% penetration in some markets. And I had never heard of it before this thread. I guess I’m just a dinosaur plodding along paying $.20 per text.
It’s wonderful overseas. You can text through an open wifi connection for free. Opening up your phone overseas can be ungodly expensive.
More like a company that supplies the same water in plastic bottles and out the taps. You can’t really turn off the municipal water supply, and you can’t deliberately ruin the quality wwithout backlash. Once people figure out it’s effectively the same stuff from their vantage, how would you sell a bottle for $2?
According to this report charging for SMS messages makes up “almost 20% of the operators’ turnover.” (I don’t know what “turnover” is, probably profit, but possibly revenue.) And the use of Facebook, WhatsApp, iMessage, and others is destroying that profit. Transmitting an SMS message costs carriers $Zero, so that entire 5/unlimited or .20/message is profit. A search for “SMS decline carrier profits” or some such will turn up articles going back over a year discussing that carriers are feeling the effect of the decline in SMS usage. Those messages are getting diverted from traditional SMS to other services providing similar functions. So yes, I can guarantee there are VPs holding meetings to figure out what to do to prevent this loss of revenue. Which leads to:
The cell companies want a choice. When you read about “Net Neutrality” it is talking about the idea that data plans are agnostic—they don’t charge different amounts for different data types, and they don’t charge the place you’re connecting to. All of the data providers, be they cell companies, cable companies, or phone companies hate this. They really would love to charge Facebook or Apple $0.001 for every message transmitted on their behalf. These companies have been lobbying for the ability to do this, while other groups have been lobbying for regulations to prevent it. The merits of the various proposals are probably better discussed outside of GQ.
With regards to the cell companies, they already do this to some degree. See the controversy involved in using Apple’s Facetime over mobile data on AT&T. Up until very recently this was completely blocked. Facetime required a wifi connection. Then AT&T said that only customers with their shared data plan could use Facetime over mobile, but recently they decided that all customers can use it over mobile data.
Another means of blocking SMS type services would be by preventing their apps from being installed on that carrier’s handsets. For an example of this, look at AT&T blocking the installation of Google Wallet on their Android phones, because they would rather their customers use the not-yet-available competing AT&T Isis service. I’ve not heard of anything like this happening with regards to the messaging services, though.
In summary, the carriers have several options. Are these options palatable to their customers? Probably not, but that might not stop them from implementing them anyway. These are not the most customer focused corporations.
Bad example, since people in fact do pay for bottled tap water. I saw some on a store shelf yesterday.
This recent article says that SMS numbers and revenue declined in this quarter for the first time ever. It attributes the change to IP-based messaging.
In this thread we see that some people also pay for texting. So far.
I find that hard to believe. My wife and I went to a T-Mobile store the other day to get her her first smartphone and they only had two “dumb” options - two flip models and one bar phone.
Turnover is Brit-and-Commonwealth-speak for gross revenue or sales.
In the interests of accuracy, this is not correct. You do have a choice; you can turn iMessage off on your phone, and if you do, then your messages will go through as SMS, even to other iOS users. But you are right that iMessage is enabled by default on iPhones and other iOS devices.
Yes, Verizon still offers phone packages without unlimited texting. We have one. My SO pays $5/month for 500 texts; I pay $0.10/text, since I send maybe 3 messages a month. And yes, both of those are gouging, but the base package is slightly cheaper.
OTOH, Verizon’s ability to screw with what you do with your data plan is constrained in ways unique among US providers. (Not how much data you can use on your data plan, or how much you pay for it, but what types of traffic you choose to use it on: the “network neutrality” concept from Echoreply mentioned upthread.)
When Verizon won the 2008 FCC spectrum auction opening up the 700MHz band for 4G LTE, they (maybe inadvertantly*) bought into an “open access” clause suggested by Google, dictating what amounts to conditions of network neutrality on the winners of the bandwidth.
It’s already bitten Verizon once. Verizon, like most providers, tries to lock smartphone users out of tethering: using their phone’s WIFI capability as a wireless access point for other devices, and the 3g or 4g data network as the connection to the internet. They do this so that they can sell you the permission to do so for $20-$30 per month, depending on plan. Yeah. “Your phone, your data bytes-per-month, but no tethering for you unless you pay us more for the privilege, Peasant.”
Someone pointed out to the FCC that this tethering restriction violates the open access requirement of the 4g spectrum… and the FCC acted. Verizon had to cease blocking applications on smartphones which provide tethering without Verizon’s “Mother may I”, and had to pony up one and a quarter million dollars to the FCC as a violation fine.
This isn’t specifically about the same kind of network neutrality as discussed, but it’s similar: A provider wanted to charge for a capability organic to the system and the phones, and acted to discriminate against alternate methods of providing this capability, and was judged (expensively) to have violated its open access obligations.
Not a bad precedent, we can hope.
*Verizon and the other winners probably thought they could either ignore the clause, or litigate it out of existence before it could bite them, but it didn’t work out that way.
According to the NY Times, the cell phone companies are already crying. They will lose billions because the cost to them of texting is virtually 0 and it will just mean lost revenue with no recompense.
Yeah, I imagine if I were getting paid buckets of cash for years and years for a service that should cost nearly nothing, I’d be a little pissy when it stopped too. The poor dears.
I’m one of those people. My rarely use my cell. I have it for emergencies mostly and still have the cheapest plan available to me which is pay as you go for $15 month. I pay for every minute of every call I make, and pay for any text I send or receive, but I still don’t ever use up my funds and end up rolling them into the next month.
Since the OP expects opinions, this one is better suited to IMHO. Moved.
samclem, moderator
Same as Verizon. But for the most part, cell phones don’t expire. We’ve got 5 people on our family plan and not one of us has a smartphone. Two of us needed a new phone last year and we ended up with one of those awful, shitty new bar phones.
I’m sure 90% of people who have gotten a new phone in the past 2 years got a smart phone. If the 35% figure is true (and it might be a bit higher since it’s been about 11 months) then a good chunk of people never bothered to switch from their old phones yet.
Hey, I just figured out how to get my fang dangled smartie phone to text via the voice to text option. It better not go away any time soon.
Not everybody friends everyone they know on Facebook, though.
I was paying $5/month for 200 text messages on my previous AT&T contract, which I hated doing out of principle, but bit the bullet so I wouldn’t hear a “CHA-CHING” every time I received an SMS from my mom. I’d generally never even break 50 per month. When I renewed recently, the $5/200 option was gone and the only choices were pay-as-you-go for $0.20 per text message, or $19.99/mo for unlimited texting.
Hell will host the Winter Olympics before I ever pay twenty fucking dollars a month for text messaging, so I’m doing pay-per-message and doing my damndest to reduce my usage to zero. So congratulations, AT&T: you were getting five bucks a month out of me for your shitty service, and now you’re lucky if you get 80 cents.
I found it odd that they were willing to grandfather in the $30 unlimited data plan with my new iPhone, but did away with the limited texting plans. But I guess that’s why they get paid the big bucks to make decisions I’m too feeble to understand. Now if you’ll excuse me, I’m going to go use my phone to watch every HD movie available on Netflix streaming, back-to-back over the AT&T LTE network.