Facebook Is Killing Text Messaging

An anonymous reader writes "We've heard many times and from multiple sources that text messaging is declining. There are multiple reasons for this (BlackBerry Messenger, Apple's iMessage, and even WhatsApp), but the biggest one is Facebook (Messenger). Facebook is slowly but surely killing the text message. As a result, the social networking giant is eating into the traffic carriers receive from text messaging, and thus a huge chunk of their revenues."

Comments

Good

[dontbgay]

Maybe carriers would reduce their crazy pricing models for SMS messages!

Re:Good

[olsmeister]

Well, it's hard to compete with free. But (if I were in the carriers' position) I would stress the privacy/advertising/data mining issues, and try to appeal to people who have no facebook account an no interest in getting one. And lower the prices ... I think the gravy train for them is nearing the end for SMS messages. So at least facebook is a positive in that regard. Anyway, wouldn't Twitter be more along the lines of direct competition?

Re:Good

[jellomizer]

But that's ok you are being mined other ways. Well you can compete with free, if you couldn't then how did Apple rise from near bankruptcy. When you had Linux growing, during that same time. I would argue we never really had privacy. Back in the pre-internet age if you were to go to the store and buy embarrassing products, the clerk could have been the town gossip, and by the end of the week you are an outcast because of some odd purchase. While now we are collecting more information, the advertisers are smart enough not to abuse the information, because if you make Jane embarrassed because she bought a product or has an issue which a product can help, you risk loosing a customer.

Re:Good

[EggyToast]

I believe that is the point -- people are choosing to use other forms of messaging and finding that they're as good, if not better, among their contacts compared to SMS. As such, they are saving themselves the unlimited texting fees.

An unlimited texting plan on AT&T is $20/mo, and on Verizon, the $5/mo tier only gets you 250 messages. The $10/mo plan gets you mostly unlimited texting. So, people are deciding "hey, everyone I text is on FB, and I can ping them on their phone the same way. Plus I can ping people who don't even have phones and are sitting at home."

So, it's more flexible, and it's cheaper. People then drop their unlimited data plans (which are add-ons and not part of the contract structure), which eats into the planned revenue for the carriers. What's worse, the carriers have no plan to recoup this fee once it's gone. They'll need to make up the shortfall by increasing data plan costs.

Re:Good

[0100010001010011]

You mean like when Target told a dad his daughter was pregnant?

Also, you loose nothing. If something is loose you should tighten it as not to lose it. Although I guess in this case you sort of did lose a loose customer.

Re:Good

[gstrickler]

$5/mo for unlimited texting? Not from Verizon, AT&T, Sprint or T-Mobile. It's a $20/mo add-on from VZ, AT&T and Sprint, or a $10/mo higher plan from T-Mobile.

Re:Good

[wealthychef]

Actually, the article you quote makes jellomizer's point.

But Target didn't stop the creepy target marketing -- it just got sneakier about it.

"With the pregnancy products, though, we learned that some women react badly," the executive said. "Then we started mixing in all these ads for things we knew pregnant women would never buy, so the baby ads looked random. We'd put an ad for a lawn mower next to diapers. We'd put a coupon for wineglasses next to infant clothes. That way, it looked like all the products were chosen by chance.

"And we found out that as long as a pregnant woman thinks she hasn't been spied on, she'll use the coupons. She just assumes that everyone else on her block got the same mailer for diapers and cribs. As long as we don't spook her, it works."

The author of the article says it's creepy, but actually I think it's clever and discreet.

Re:Good

[dgatwood]

I keep hearing people say that SMS messages are effectively free for the carriers, but such statements don't present the whole picture, and as a result, are highly misleading.

Yes, text messages are sent using junk parts of packets that aren't used for anything else. However, there are a limited number of time slots per frequency, and a limited number of frequency slots. Therefore, it is a scarce resource. If text messages were free or nearly so, there is the danger that your text messages would be delayed by hours because of the backlog, making them early useless.

When a backlog does occur, there are only three ways to fix it: add more bandwidth (which costs money), change phones so that they can deliver text messages using data traffic (which effectively takes bandwidth from other things, eventually resulting in the need to add bandwidth, which costs money), or charge a fee so that fewer people send text messages, thus avoiding the tragedy of the commons.

So it is no more "nearly free" than biodiesel made from restaurant grease is nearly free; initially it may seem that way, but as soon as demand builds up, suddenly there's not enough to go around, and the cost of increasing the supply makes it largely infeasible to do so.

What a choice...

[betterunixthanunix]

On the one hand, a cartel that charges ridiculous prices for messaging. On the other, a service which will not allow you to send messages to users of other services.

Re:What a choice...

[bemymonkey]

Facebook IM is just the gateway drug... As soon as people realize that text messaging should essentially be free, they're just seconds away from installing another IM client on their phone. Most people won't, because they don't need to communicate with anyone outside their Facebook friend list... But the idea should be planted :-)

Rediculous markup

[neokushan]

SMS has a ridiculous markup, in the thousands of percent - sorry, telcos, but the gig is up. You've had your free lunch and it's over, how about instead you give us better data options so you can at least make some money out of all these free services?
Face it - SMS and phone calls are a dying business, data is the future so invest in your infrastructure, encourage its use and profit from the fact that nobody's likely to offer free universal data any time soon.

Re:Rediculous markup

[contrapunctus]

actually it's infinity percent markup since SMS costs telcos nothing at all...

Re:Rediculous markup

[fa2k]

actually it's infinity percent markup since SMS costs telcos nothing at all...

Great, now let's tunnel IP over SMS and get infinite, free data bandwidth

Re:Nope

[betterunixthanunix]

At best, facebook is an email supplement

How can Facebook messaging even be compared with email? Can you exchange messages with people who do not use one company's services? Can you run your own Facebook message server?

Don't worry about the mobile carriers

[__aaltlg1547]

They're getting paid. Facebook replaces messaging because people are using it through their smart phone. So they're paying for data plans.

They should get worried if people stop buying data plans.

Re:Don't worry about the mobile carriers

[Anonymous Coward]

With the fact that the data plans are so small for phones (just doing a round of Windows updates and application updates on a laptop will put me over cap if I had a phone plan dating from 2010 or newer.), the carriers are making in the money even with people that have unlimited texting.

Before I picked up an iPhone, I paid $75 a month. With the iPhone, I easily pay $200/month.

Texting isn't where you will end up being robbed, it is the data plans and the paltry bandwidth quotas.

Re:Don't worry about the mobile carriers

[the_enigma_1983]

A facebook message consisting of 160 characters would be less than 1kB (amortised). The usual cost of an SMS is between 10c and 25c. 10c per kB equates to $100 per MB.

In other words, telco profit margins on SMS when compared to FB messages are orders of magnitude smaller. It might be even worse, I've heard that SMS messages are sent in some form of "control" packet hence the 160 char limit, meaning that SMS overheads are (somewhat) essential to running the mobile network.

Re:Don't worry about the mobile carriers

[Paco103]

In the US you do. It was accepted on phone calls when cell phones first came out, because the caller does not pay extra to place the call as they do in some countries (if I understand correctly). This was more acceptable since I have the option to not answer a call. With text messages, however, I don't have the option to not get one. In the US, I don't know of any company that doesn't charge for incoming texts, but some do charge less for incoming texts than outgoing.

What?

[sureshot007]

So, if you have a phone plan that includes unlimited text messages, but don't use them as much now, wouldn't that be ADDING to the teleco's revenue?

Further more, how would a data driven app displace a cellular function??? Text messaging uses less power and resources on my phone. I can text all day long but if have to be connected to the internet to use facebook, I get far less life out of my battery. I don't get why people would prefer a data app over a native cell feature...but that's just me.

Re:What?

[bondsbw]

SMS messages are routed over control channels, which in most cases means that there is practically zero additional cost for the carrier.

So, no, the failure to use text messages doesn't change carrier revenue. The failure to extract money makes a lot of difference for carrier revenue... which is what happens if you no longer get a texting plan, or if like me, never had one and stop sending the ~10 messages per month I have been doing.

No huge chunks in Europe

[Mirvnillith]

In Sweden text messages tend to be free (but only the first 5000 each month) with plans at about $21 a month (this example with 3GB data as well). I know the US is different (recipient paying for text message and such), but there are operators surviving without this huge chunk of revenue ...

Re:No huge chunks in Europe

[I_am_Jack]

Then you weren't a teenage girl with a cell phone. My daughter averages 5200 a month .

Re:Nope

[GuldKalle]

yes
https://www.facebook.com/help/?faq=224049364288051

Moving texts between cell sites

[tepples]

SMS costs telcos nothing at all

...to transmit, as text messages are stored in an otherwise unused field of the GSM keep-alive packet. But maintaining the software and backhaul network for moving these 160-byte packets around from one cell site to the next does cost greater than zero.

Re:Moving texts between cell sites

[allo]

let epsilon be greater than zero

Re:Cutting traffic?

[damn_registrars]

Exactly how is facebook cutting traffic for the carriers? If I send a text message via FB versus the sms application in my phone, are not the same amount of bytes being transferred? Actually, the FB transfer probably uses more traffic.

You got that right. SMS uses virtually no traffic for the carrier, it is well above 99% profit. Facebook isn't hurting their traffic - it is actually increasing their traffic. Rather, it is hurting their bottom line because they can't get away with marking up data rates to the degree they can mark up text rates. This "story" is basically just the carriers whining that their profit margins are decreasing because they got too comfortable with the obscene returns they were getting from text messages.