Marketplace®

Daily business news and economic stories

Texts dwindle, fees to compensate

Yep, you're going to get hit

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.

 

Related Topics

Collections:

Latest Episodes

View All Shows
  • Marketplace
    a day ago
    26:11
  • Make Me Smart
    a day ago
    28:43
  • Marketplace Morning Report
    2 days ago
    6:58
  • Marketplace Tech
    2 days ago
    12:22
  • Million Bazillion
    4 days ago
    5:01
  • This Is Uncomfortable
    a month ago
    2:27
  • Financially Inclined
    2 months ago
    12:30
  • How We Survive
    2 months ago
    22:09
  • The Uncertain Hour
    4 months ago
    22:50
  • Corner Office from Marketplace
    5 years ago
    20:58