Texts dwindle, fees to compensate

It’s no secret that we like to text. Kids do it thousands of times per month, much to the chagrin of their phone bill paying parents (who also do it). But, with the advent of non-text messenger services like BlackBerry Messenger (BBM), iMessenger, and Google Voice, people are sending fewer and fewer texts through wireless carriers. That all means that wireless carriers are making less money off text messaging and will, most likely, try to recoup that cash in a different way. Witness the recent Verizon $2 “convenience fee” debacle that was announced and quickly reversed after customers raised a fuss. People, this is just the beginning.

Reuters spoke to Craig Moffett, an analyst with Sanford Bernstein: “At current rates SMS brings in $1,000 for every megabyte of data transmitted compared with the 2 cents to 13 cents per megabyte generated by a typical wireless Internet data plan, according to Moffett, who notes that this revenue is virtually ‘100 percent profit.’”

Don’t expect to see huge hikes in your bill just yet. Wireless carriers are still making a tidy sum off texting, thank you very much. The key turning point will be “interoperability.” Right now, when you use a service like iMessenger, it only works with other people who have an iPhone. Same goes for BlackBerry users and BBM. iPhone text to BlackBerry means a traditional text. Interoperability comes into play, if companies decide to let their software communicate with each other. If/when that happens, look out profits.

 

About the author

Marc Sanchez is the technical director and associate producer for Marketplace Tech Report where he is responsible for shaping the sound of the show.

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