Apps Redirect Text Messages, and Profits, From Cellular Providers
By BRIAN X. CHEN December 4, 2012
For a long time, opening a cellphone bill was scary for the parents of teenagers. Charges for texting could reach hundreds of dollars a month, prompting many families to sign up for unlimited plans. But at perhaps $20 a month for each family member, that quickly added up, too.
Relief is on the way. Cellphone users are sending more text messages than ever, but increasingly they are free - thanks to the Internet. While that is good news for consumers, it could cost the world's wireless companies tens of billions of dollars in lost revenue.
Standard texting, the kind where you send abbreviation-filled messages over a cellphone network, has been in decline in many parts of the world, and now appears to be shrinking in the United States. That is because smartphones can use free Internet-powered services that send messages over data networks instead, and those services are attracting millions of users.
The shift is opening an opportunity for big companies like Facebook and Apple and smaller start-ups like WhatsApp and Kik, which are making aggressive grabs at this market, aiming to put themselves at the center of how people communicate in the smartphone era.
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