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Obituary: the coming death of SMS

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With iMessage, BlackBerry messenger and WhatsApp, why should we use SMS which is still charged by message? Here are the three main reasons why SMS will become irrelevant in the next five years, and why your kids will wonder why our generation ever put up with such an expensive and limited form of communication.

By Karn G. Bulsuk

The SMS is dead! Long live the SMS!

With the advent of services such as WhatsApp, the impending release of iMessage, the exploding market for smartphones having taken over sales of feature phones, and the ready availability of affordable data plans, the case to use SMS is imploding. Here are three reasons why you will say farewell to SMS in the next five years.

1) Compared to WhatsApp, sending a message via SMS is very expensive

A study 2008 performed by space scientist Dr Nigel Bannister of the University of Leicester in England indicated that sending an SMS is at least 4 times more expensive compared to transmitting data from the Hubble Space Telescope. His calculations concluded that while it cost US $14.20 to send one megabyte (MB) for data transmission to and from Hubble, the same megabyte sent over SMS would cost US $560.

If we take that one step further, the cost of sending a message through WhatsApp is significantly cheaper than SMS. If we assume that a user is on a data plan with a 2 GB data cap, that person would be able to send 15.3  million text messages* - virtually unlimited messaging.

Based on those astronomical numbers, why would anyone need to continue to use SMS? The internet backbone is also much more versatile than SMS and its younger and equally expensive sibling, the MMS, with the ability to send pictures, movies and anything else without having to incur a per message charge.

The Japanese discovered this as far back as 2002, which is a country where SMS is virtually unknown. Every single mobile phone has its own email address, and any messages are sent via the internet and standard email.

2) SMS isn't cool anymore
Anyone can have one of these...

Using iMessage, WhatsApp or BBM signifies you have the ability to own a cool smartphone, like a membership to an exclusive club. Anyone with any old school Nokia has SMS, but only the select few have iMessage.

Even Eelco Blok, chief executive of Dutch telecommunications company KPN admits to this. He was quoted saying "It's not cool anymore to SMS."

Besides, given now that mobile users have the option of writing long messages with the ability to attach photos, movies or whatever else they want, why would users be content to the 160 character limitation of SMS?

3) Explosive growth of smartphones

According to a Nielsen study, the sales of smartphones in the US have exceeded those of feature phones for the first time, with 55% of those buying new phones between April-June 2011 choosing a smartphone, meaning that an increasing number of customers have access to internet based chat apps and email. If your friends now all have WhatsApp, the cross-carrier argument to use SMS simply no longer exists.

The smartphone growth argument is also starting to hold water in developing countries as well. Last year I argued that the free nature of Android would disrupt the market by lowering entry barriers, allowing low-cost handset manufacturers to focus on hardware instead of both hardware and software.

It has. We're now seeing local manufacturers producing cheap handsets with all the features that you'd expect in a typical smartphone. They're not top notch and some of them are pretty bad to downright terrible, but they do run all the basic apps that an Android model should. That includes WhatsApp.


Some hard statistics showing decreasing SMS volumes

...but not everyone can have
one of this.
Hard statistics seems to pave the way for SMS's twilight. The number of outgoing texts via KPN's youth-targeted texting service decreased by 8 percent in the first three months of 2011.

In fact, KPN attempted to degrade services to applications competing with SMS such as Skype, citing decreased SMS revenue as justification. They ended up facing a revolt by the Dutch, a probe by the European Union and finally the passage of a net-neutrality bill by the Dutch Parliament, prohibiting such actions.

The concept of net-neutrality means that telecom providers are not allowed to discriminate traffic based on usage. For example, someone using Skype to make a phone call must be allowed to use it without any artificial service degradation imposed by the provider.

Other major carriers also took a similar hit. US carrier Verizon stated that consumers sent an average of 2,110 texts in the third quarter of last year, but just 2,068 in the fourth quarter, while AT&T saw texting volumes decrease from 41 per cent in the first quarter of 2010 to 21 per cent over the same period this year.

While carriers aren't about to let the high margin, USD $25 billion a year business fade away without a fight, consumers are starting to make it clear that they are leaving SMS for cheaper alternatives.

And finally

With an explosive number of smartphone users pouring into the market, the quick development of cheap Android based phones for the developing world, and the development of wireless data coverage in even the most remote areas of the globe, it is only a matter of time before the feature phone becomes extinct, and with it, the SMS that provided us with 160 characters to express everything from love to divorce.

Good bye SMS. You served us well, but like a high maintenance boyfriend/girlfriend, you will certainly not be missed.


Notes

* One SMS contains a maximum of 160 characters and is 140 bytes in size. 2 gb = 2,147,483,648 bytes. 2,147,483,648 / 140 = 15,339,168.9 SMS messages.

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