Facebook puts pressure on text messaging services
I’ts interesting to note that many telecom operators are claiming
that Facebook and other social media applications are threatening their
text messaging, SMS, business. The number of SMS’s sent by customers,
mostly mobile users, is shrinking year-by-year since the heights of
2007/2008. This year (2010) telecom operators in Sweden, Norway and
Denmark report a significant decrease in the number of messages.
One reader commented frankly on his experience:
So, it seems evident that Facebook, and other social media, is putting pressure on what has been one of the cash-cow of mobile network operators. Some of the reasons are, as suggested by the reader response, the ability to personalize messages in much more details than possible through text messaging, although using MMS instead of SMS would enable sending both photos and voice files. However, due to various reasons, MMS has never approached the popularity of SMS.
Another reason is most probably cost. Sending text messages is charged by the message, unless it’s sent between users that subscribe to the same network – then it’s normally free – as offered in many mobile plans. Sending MMS is more expensive and not necessarily free within the network, meaning that users have to pay for each message irrespective of which network the recipient subscribes to. This, among other things, has caused users to be aware of using MMS, as well as it’s legacy of being a very expensive service.
Smartphone users access Facebook via WiFi connection or through 3G. Using a WiFi connection usually makes any cost considerations irrelevant, at least for the average Facebook user. Accessing through 3G eats bandwidth and data, but users with normal data plan packages tend not to worry too much about Facebook usage. The AT&T DataPlus data plan, for example, includes 200MB of data for $15 per month and supports, in average, downloading/uploading 50 photos to social media sites like Facebook (as part of other activity such as browsing, email and more) .
I suppose it remains to be seen if this trend will continue to adversely affect the mobile operator text messaging business, although it certainly seems likely. What can operators do to avoiding loosing more of their business? Increased mobile data revenues are not going to completely compensate the loss of text messaging revenues. One answer would be to provide some value added services to Facebook users, such as location and other network centric information. It’s clearly not going to be easy finding compensating services, but operators will have to use creativity and make trials for identifying potential sweet spots.
In Sweden, the four operators Tre (3), Tele 2, Telia and Telenor distributed a total of 72.5 million text messages on Christmas Eve, down from 76.5 million in 2009. In Norway, Telenor report a decrease with 5 million text messages compared to 2008, this year Norwegian customers sent 17.1 million SMS. The same pattern can be found in Denmark, where Telia report a decrease by 1 million SMS.This development is substantiated by the fact that data traffic has increased for this Christmas, compared to previous years. One likely explanation is that users are taking photos and uploading them to their Facebook account – and most likely, updating their status and commenting on others at the same time.
One reader commented frankly on his experience:
I agree. I actually didn’t send any text message greetings
this year vs. 100+ last year. I feel like it’s not personal enough
to just send text messages. Therefore I opted for fewer messages
but personalized for every single person, through facebook. Why
facebook? I don’t know. It’s a quick and easy medium, people check
it frequently and it feels more personalized w/ picture and longer
texts. Merry Christmas! /Jonas
So, it seems evident that Facebook, and other social media, is putting pressure on what has been one of the cash-cow of mobile network operators. Some of the reasons are, as suggested by the reader response, the ability to personalize messages in much more details than possible through text messaging, although using MMS instead of SMS would enable sending both photos and voice files. However, due to various reasons, MMS has never approached the popularity of SMS.
Another reason is most probably cost. Sending text messages is charged by the message, unless it’s sent between users that subscribe to the same network – then it’s normally free – as offered in many mobile plans. Sending MMS is more expensive and not necessarily free within the network, meaning that users have to pay for each message irrespective of which network the recipient subscribes to. This, among other things, has caused users to be aware of using MMS, as well as it’s legacy of being a very expensive service.
Smartphone users access Facebook via WiFi connection or through 3G. Using a WiFi connection usually makes any cost considerations irrelevant, at least for the average Facebook user. Accessing through 3G eats bandwidth and data, but users with normal data plan packages tend not to worry too much about Facebook usage. The AT&T DataPlus data plan, for example, includes 200MB of data for $15 per month and supports, in average, downloading/uploading 50 photos to social media sites like Facebook (as part of other activity such as browsing, email and more) .
I suppose it remains to be seen if this trend will continue to adversely affect the mobile operator text messaging business, although it certainly seems likely. What can operators do to avoiding loosing more of their business? Increased mobile data revenues are not going to completely compensate the loss of text messaging revenues. One answer would be to provide some value added services to Facebook users, such as location and other network centric information. It’s clearly not going to be easy finding compensating services, but operators will have to use creativity and make trials for identifying potential sweet spots.
Categories:
CLOUD COMPUTING,
MOBILE CLOUD
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