Carriers have made a killing over the last decade by charging customers absurd rates on SMS texting plans, but the times are quickly changing.
To avoid SMS fees, smartphone users have embraced free chat app messaging via apps like iMessage, WhatsApp, and Kik. As a result, SMS is starting to die a slow, and hopefully painful death, because free app messaging has officially overtake SMS as the most popular way to text message on a smartphone.
According to a report from Informa, 19 billion messages were sent per day on chat apps in 2012, compared to 17.6 billion via SMS text. Because fewer people are sending SMS texts, a separate research firm, Ovum, estimates that more than $23 billion of revenue was lost by the carriers.
The shift away from SMS is probably going to have a big impact on the amount of revenue mobile carriers are able to generate, but for now, SMS will still remain a key player in the sector. While chat apps are being used more frequently on smartphones, half of the world is still using feature phones that can only send messages via SMS, so it’s not going to die just yet.
SMS revenue is expected to grow to $127 billion by 2016, while it’s also projected that nearly 50 billion messages will be sent using apps in 2014, compared to just over 21 billion messages sent through SMS.