One of the great accidental successes of our times has been the Short Messaging System – or SMS – which was designed as a control function on GSM mobile phones.
In 1993, telcos in Finland started offering SMS as a feature and Nokia began supporting the service on their phones.
Text messaging quickly became a worldwide success as mobile phone users found sending a text message was often more convenient that calling someone.
As the marginal cost for providing SMS is effectively nothing, the feature being built into equipment, the service was a goldmine for mobile phone operators. However the tide might be turning as apps take over.
This was emphasised in a submission by telco Optus to the Australian Competition and Consumer Commission on some regulatory changes governing mobile connection costs where the provider raised the point that the rate of SMS growth is slowing.
First, while SMS usage has grown significantly since 2009, the rate of this growth has slowed significantly over the last year few years. This slow-down is largely due to greatercompetition from IP-based over-the-top (OTT) messaging services.
So how much money? Txt messages were costing 20c per message. 160characters is 160 bytes so that’s 6,400 text messages per Megabyte or $1,280… $12,800 per Gig. My data plan is 4g for $30. So will I use SMS or an OTT alternative?
Not a hard choice and certainly now I have two teenage girls on their phones continuously, mostly using the wi-fi at home, thank god for alternatives.
$12,800 per gig was never sustainable but no wonder the carriers are bitching.