A report out of the UK suggests that mobile carriers ‘lost’ something in the region of $US13.9 billion in SMS charges due to the rise of instant messaging services on smartphones. It’s left me wondering: What relevance do mobile voice and SMS charges have in an IP world anyway?
I originally saw the report on the BBC web site; but it’s based off Ovum research based on usage statistics from the leading social messaging apps used on smartphones. That figure of $US13.9 billion makes for a nice headline, but it’s total rubbish; you can’t lose what you never had, as it’s a projection of what the carriers would have taken in with SMS revenue had that been used as the communications medium. People didn’t, and therefore nothing was ‘lost’ in that sense.
What struck me — and this is purely a personal observation, if you’ll forgive me — is that as these kinds of services all start to lean more and more on data connections — are the rates we pay for things like SMS and even voice calls becoming increasingly redundant?
Speaking personally, my mobile phone plan has a number that’s associated with calls and texts, but (leaving aside the simple fact that ‘value’ of a plan is always a nebulous concept, given flagfalls and special timed rates) I’ve honestly no idea what it is, and that doesn’t bother me at all, because I never, ever go anywhere near it. It’s not that I’m call or text-phobic, but simply that the amount involved is more than I’ll ever use in a month. It could be quoted at the price of the Death Star, and it still wouldn’t make a difference to me; I pay what I pay because of the quantity of included data, not the voice and text inclusions.
It’s not so much that mobile carriers are ‘losing’ money that they never had in the first place; they’re just seeing a normalisation of the market towards data costs. The margins are undeniably different; SMS chatter is almost obscenely profitable, data less so — but that’s not the consumer’s problem in any case.
Damo
Wednesday, February 22, 2012 at 3:08 PMSurely the cost of an sms plan has simply been usurped by the cost of a data plan?
Si
Wednesday, February 22, 2012 at 3:10 PMWhen carriers charge you the cost of 1 minute for a 10 second phone call, and at extravagant rates, on top of flagfall etc, it’s no surprise that people are using IP related alternatives
MotorMouth
Wednesday, February 22, 2012 at 8:18 PMBut which carriers do that? My nominal call rates are 99c a minute and 35c flagfall, but I get $550 worth for $39 a month, so the real cost is something like 7c a minute and 1c flagfall, which is nothing. I rarely use more than $100 worth of it. As Alex points out, plans are chosen on the basis of the data component. I’d have settled for a plan with just $200 worth of included calls if I could have got 1.5Gb of data as well. Even if I called my band’s manager in Munich every week, I’d still not come close to reaching my plan’s cap, therefore call rates are completely irrelevant. OTOH< there is no way I'd waste my data allowance on VOIP or anything else as stupid as that. It is teh complete opposite to the way you work your fixed line.
Sylphier
Wednesday, February 22, 2012 at 3:26 PMFor the user, the cost to send a message using IP service is far cheaper than sending a SMS. From my dealings with Telstra engineers, they are saying that the company is not making as much money as required to maintain and upgrade the network and infrastructure.
I believe, eventually all mobile phone plans will all end up being summarised as included data quota. Say a 1 minute call cost X kB, a message costs Y kB, etc etc
Sam
Wednesday, February 22, 2012 at 3:36 PMConsidering I have unlimited texts, they make nothing off me from that :P, probably why I send over 1,500 a month also >_< but yes, data amount is the reason why I got the plan I did
TSH
Wednesday, February 22, 2012 at 3:38 PMUpon checking it’s not completely outrageous, I’ve not cared about the cost of calls, MMS or SMS for a while now. I’m on a “cap” plan, and what matters to me is the data I get and the handset I use to suck it down.
Looking at my usage, and projecting how it’ll change over the coming year … hrm, Telstra may be gaining a customer soon.
klaw
Wednesday, February 22, 2012 at 4:09 PMThis article would be true, if everyone had a smartphone and used it to the fullest. However, I suspect only a relatively small percentage of smartphone users realise the full potential of their phones and continue to use them just like their older dumbphone brethren.
In Australia, our choice of phone plan often has little to do with the amount of included “value” and is often dictated more by the handset we wish to purchase and, as you point out, the amount of data we think we need.
The amount of included “value” in most is fairly meaningless, as call rates vary so significantly among carriers. The amount of included value is ever growing, but so is the price of calls, SMS and other inclusions – so it’s no longer possible to easily compare deals among carriers.
Eventually, carriers will essentially become ISPs hawking mobile data over 3G and 4G networks. But as much as anything else, this depends on VoiP and instant messaging companies like Skype to truly spruik the possibilities of using their services and bypassing the carrier’s high prices. People who read this site know about these things, but few of the general population do.
MotorMouth
Wednesday, February 22, 2012 at 8:23 PMI disagree. I think cap plans make call costs largely irrelevant, regardless of what sort of phone you have. I’ve been on cap plans for at least a decade, probably several years longer, which makes individual call costs largely irrelevant. If anything, the data component actually makes us spend more than we would if we had feature phones.
warcroft
Wednesday, February 22, 2012 at 6:44 PMThe report of “lost $13.9 billion” then your comment of “but it’s total rubbish; you can’t lose what you never had” sounds a lot like the piracy argument.
Studios claim to lose billions from piracy, but you cant lose what you never had.
So, whats next? Telstra suing Facebook and other messaging services?
warcroft
Wednesday, February 22, 2012 at 6:46 PMBut you know what needs to happen? A single internet plan you can use for everything.
Right now its home internet, then your mobile, then your tablet and whatever else you have.
What about one plan which covers everything? The big all encompassing plan?
warcroft
Wednesday, February 22, 2012 at 6:47 PMEg: Your mobile phone is your internet hub. Take it with you when you go out and when youre home your PC, tablets, foxtel, whatever all tether through it.
martyfmelb
Wednesday, February 22, 2012 at 8:57 PMSounds like an admirable goal, assuming the sheer quantity of radiation involved isn’t going to knock smoking from 1st place on the Stuff You Should Give Up charts.
I don’t know about Telstra folks, but Optus is struggling with 3G data congestion (or is it interference?) as it is. Multiply that by 50-100 times,l just to get on par with desktop data usage. Now, add increased on-the-move data usage as well.
4G, you’d better be good.
MotorMouth
Thursday, February 23, 2012 at 12:24 AMA PocketWiFi would be a better choice. It seems to get better signal most of the time where I am and all your devices connect to it easily. The only downside is that battery life is not spectacular.