Sep 062012
the decline of voicemail and SMS text is hurting telcos

A survey by US phone company Vonage reports cellphone users are ditching voicemail and moving to alternatives.

Messages left on user accounts in July fell 8% while retrievals fell 14% compared to last year.

While those figures may have something to do with the billing practices of US carriers, it shows a much bigger trend in the telecommunications sector away from products which have been very profitable over the last two decades.

Voicemail, like SMS text messaging, has been a lucrative earner for telcos since the arrival of mobile phones.

Users get billed for calling a number then for leaving a message – often with a few delaying menu items to make sure callers get hit with a couple of billing units. In turn the receiver is charged for being notified they have a message, billed again for retrieving it and then pays a monthly fee for the privilege for all of this.

Five bites of the cherry for one phone call – nice work if you can get it.

This entire revenue stream is now dwindling as customers start using Internet based services to send messages. While the telcos charge extortionate rates for mobile data it is still far cheaper per message than the alternatives.

In many ways the profits from voicemail and SMS were a classic transition effect – a profitable window of opportunity opened for a short period when a new technology was introduced. Now those windows are closing.

For telcos, they have to find some profitable new channels. Even if they achieve their dreams of becoming media distributors or even content creators they’ll find both of those fields are far less lucrative than the mobile phone networks of a decade ago.

While telephone companies aren’t going to grow broke soon, today’s data networks aren’t the golden goose many people expect from telcos.

The smart telcos will adapt and survive, the ones who think the good times of a decade ago are coming back soon are in for a miserable future.

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