Cash cow is dying as messaging apps overtake SMS by volume


For the first time, more messages are being sent via applications such as iMessage, WhatsApp and Viber than traditional texting. That’s the message of a new study which found that messages sent using such apps outnumbered those sent through carrier-based SMS in 2012.

That lead is expected to widen this year as chat apps send twice as many messages as texting. The study by Informa suggests the lucrative business of text transmissions could be winding down for carriers.

Although traditional SMS has a larger user base, iMessage, WhatsApp or other chatting apps are sending more texts per user, giving them the momentum…

On average, a chat app user sends 32.6 messages per day, versus just five for SMS, according to the Informa study shared by Financial Times.

This despite there being 3.5 billion SMS users compared to 586 million among the top six messaging apps surveyed by the researchers.

However, don’t cry just yet for carriers.

The cell firms are expected to earn $120 billion from texting, a service which essentially rides for free on existing voice connections.

As SMS celebrates its 20th anniversary, some cell phone providers are partnering with upstarts, such as WhatsApp which claims it handles 18 billion messages every day. And Nokia, for instance, sells the handsets specifically optimized for the popular chat app.

We could see the popularity of messaging apps wane if they decide to charge for the service. WhatsApp, for instance, is reportedly considering a paid 99 cents a year subscription.

Carriers, on the other hand, basically give away unlimited texting when you purchase a data plan. Perhaps most interesting is the evolution of communications underway. First was the voice call, which largely vanished as texting became common.

Now, as smartphones outnumber dumb feature phones, app-based messaging is set to eclipse texting. The next evolutionary step is likely to be calling from Facebook, now in limited roll-out, and other social networks.

Do you tend to use SMS over chat apps or the other way round?