
Operators will lose $54 billion by 2016 due to SMS replacement apps - esolyt
http://www.fiercewireless.com/europe/press-releases/ovum-figures-indicate-operators-will-lose-us54bn-2016-due-smartphone-messag-0
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confluence
No - consumers will save $54 billion by 2016. They'll then spend those savings
on other things.

It's a good thing.

But I'm afraid it's not the only industry about to get absolutely crushed by
progress. This story reminds me of the time Steve Jurvetson (a VC of DFJ fame)
discussed the amusing interactions he had with a large engine oil company.

He clearly illustrated to them them how, and why, their synthetic engine oil
business ($10 billion a year) was about to get absolutely decimated by the
introduction of essentially maintenance-free electric vehicles. He then told
them that they had better diversify their synthetic oil cash cow, before
electric vehicles came in and ate them for breakfast.

Did they bother heading his warning? No. Instead, they laughed in his face.

Everyone that services cars is next on this list - outside of brake pads and
body panel beaters.

I wonder how long it will be before there's an article that states: "World to
lose $15 trillion as AI and automation replace most humans."

~~~
powertower
> I wonder how long it will be before there's an article that states: "World
> to lose $15 trillion as AI and automation replace most humans."

Not very long.

We are way pass the points on a bell-shaped curve were an increase in
efficiency (due to technological progress, and accumulation of knowledge)
produces an increase in overall job numbers.

We are now somewhere over the hump, and are at a point were for every job
efficiency creates, it removes 2-5 overall jobs.

Full employment is no longer sustainable.

~~~
AlexMuir
I agree that full employment is not sustainable.

But that's a positive thing. Full employment in 1857 meant everyone from the
age of 13 working 60 hours a week in rough conditions. Now full employment
means everyone over 21 working 48 hours a week in a safe environment. In 30
years it will mean people between 21 and 35 working 20 hours a week at home.
That's progress.

~~~
glesica
Assuming the system keeps up. Right now it is nearly impossible for _many of
us_ to work part-time without taking a huge hourly rate cut. You can
(sometimes) work as a contractor/consultant, but then the tax and healthcare
systems are stacked against you.

I personally think it is insane that we still work 40 hours per week today.
Many people seem to deal with the ridiculous situation by wasting time at work
(e.g. surfing Reddit for half the day). This is bad for the bottom line and,
more importantly (because the effect is broader), bad for employee-morale.

I think part of the problem is that many in our society (talking about the US
here) equate hours with "work". If you don't put in the time, you must not
have done the work. And if you do the work in less time, you should just do
more work (even when that doesn't make sense).

This jives with the message we keep hearing from the political class. That we
have had things too good and that we just can't afford for everyone to have
such "lavish" lifestyles any more. They seem to think things need to move in
the opposite direction, more people working longer for less compensation.

I strongly disagree. But then, I am much more concerned with the quality and
general happiness of my life overall than I am with how many widgets I create
or consume.

------
keithpeter
UK: sms messaging here provides me with a _uniform_ and _universal_ way of
contacting any mobile phone owner who want to be contacted, e.g. students I
need to tell about a classroom change.

I just use a Web service like bulksms. In the UK and I believe Europe,
receiving an sms message does not cost the recipient any money. I don't have
to track who uses facebook and who uses twitter, they don't have to 'follow'
or 'like' some institutional account.

~~~
UnoriginalGuy
Use RSS, e-mail, or as you said Twitter. There are a lot of alternative
solutions to this problem.

I grant that lack of uniformity is a problem.

~~~
keithpeter
That was the point I was making but didn't communicate effectively. There are
a _lot_ of _different_ alternatives. Most of these alternatives are not 'push'
but depend on the recipient monitoring something.

In the Further Education college I teach in, 98% of students have a mobile
phone. Many of those are basic pay as you go dumb phones. Some feature phones,
Blackberry phones are popular in UK with teenagers. A few have iPhones and
Samsung and the LG slabby things. Not all have Web access on the phone (or
have it but don't want to turn it on).

A result that surprised me was that teenagers _don't access the Web that much_
on laptops or desktops.

The common denominator here is sms. I get 98% access. It costs a little money,
but not huge. I hope it does not go away as we have brand (phone, carrier)
dependent messaging.

~~~
mertd
SMS is great and should not go away. Charging a non trivial amount per message
is ridiculous. US carriers are the worst offenders on this. They charge up to
20c to the sender AND the recipient.

------
leoedin
Do people in the US tend to pay for individual text messages?

Almost everyone in the UK has an unlimited or close to unlimited texting plan
(3000+ texts). Given that everyone's paying for it anyway, the actual revenue
gained by someone sending a text is 0. In fact, because a text will use some
tiny amount of infrastructure, they'll potentially lose more money the more
texts people send.

Most people I know who use whatsapp use it more like an IM client for group
messages rather than for one-to-one messaging. As _everyone_ has more or less
unlimited texting available to them, nobody uses whatsapp for financial
reasons because there's no savings made.

This will only be an issue once people start to realise that they're not using
as many texts and demand to pay less. I can't see that happening in the UK.

~~~
DrJokepu
"Almost everyone" is basically almost everyone _you know_. It's difficult to
find data on the market share of pay as you go plans in the UK but I'm sure
it's a significant portion of the market. These plans typically charge for
individual text messages unless you get a special plan or meet some criteria
(e.g. top up at least £10 a month).

~~~
objclxt
It's _huge_. The most recent OFCOM market report[1] reckons just over half of
all mobile customers in the UK are on PAYGO. Don't under-estimate the UK pre-
pay (PAYGO) market. It's quite easy to, because most people reading this are
probably on contract themselves.

Not only is pre-pay half the market in the UK, it's by far the hardest to
retain. Pre-pay customers aren't loyal (partly because they're not locked in
to contracts, partly because they tend to be price conscious), and because
they skew young they tend to be the customers more likely to both a) use SMS,
and b) switch to things like WhatsApp.

[1]:
[http://stakeholders.ofcom.org.uk/binaries/research/cmr/cmr12...](http://stakeholders.ofcom.org.uk/binaries/research/cmr/cmr12/CMR_UK_2012.pdf)

~~~
gabemart
I find that really surprising because phone service is now just _so damn
cheap_ in the UK. After a cashback offer, I'm effectively paying £5 a month
for more minutes, texts and data than I can hope to consume. I guess my needs
are relatively modest, but so (I imagine) are most non-business customers'.

------
pcurve
I'm afraid consumers won't pocket that $54 billion either as long as the
carrier cartel maintain iron grip. Just look at what Verizon is doing. You
can't even unbundle "unlimited text and talk" from their non-prepaid plans
anymore. 1GB smartphone plan will set you back $90/month, which is only a deal
if you fall under a small percentage that actually go over 500 minutes per
month AND send thousands of SMS. Just keep buying ATT and Verizon stocks guys.

------
coryl
They'll make it back by ripping you off on your data plans. (Canada)

~~~
joezydeco
Exactly. The carriers still own the transport layer, so they'll just reshift
their plans to cover the loss. Some carriers in the US have introduced these
"shared data" plans which pretty much accomplish the task.

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macspoofing
>Ovum highlights the rapid increase in the number of OTT (over-the-top)
players, and demonstrates that social messaging is not a short-term trend, but
a shift in communication patterns.

Who would have thought that SMS is not the future of communication.

------
ronyeh
Good riddance.

~~~
neotek
I don't understand this sentiment. Good riddance to what, exactly? A simple
and universal method of quick communication between literally every cellphone
in the world?

~~~
thedrbrian
Probably the rediculious fees for sending and receiving text messages. As a
British person I can't believe the American networks charge to receive text
messages.

~~~
mitchty
Well its more bs than just getting charged for getting a text. You basically
get 2 choices: * pay per text (which is totally lame I agree) * pay ~$20/mo
for unlimited

Most people just opt for the latter because if you ever send more texts a
month than $20 it "pays" off in the end.

Both options suck, the phone companies not being able to gouge for texts is no
love lost in my opinion.

~~~
ronyeh
The third option is to cancel your text plan, which I have done. If my friends
send me a text, it disappears into the ether (no error message). I'm trying to
get folks used to contacting me through any other means (email, fb, g+, gchat,
call me...maybe?).

~~~
mitchty
True, I don't consider that much of an option personally as I rather prefer
texts to the rest. But thats just like, my opinion man.

How has dropping texting entirely worked out? I've often wondered what the
impact would be myself. Not that I have the balls to do it.

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Maven911
Since i know about RCS and the aricle talks about it: It is mostly a pipe
dream for operators, these services (file shharing, video calls, IM) already
exist for much cheaper then what the telcos plan to charge. This is all part
of the IMS technologies that have not been taken up by the market for approx 7
years now...its a sad tale of too little, too late

------
pi18n
Those poor operators will have to find something else to overcharge for.

------
stephen_g
I wonder how long until we see legislation popping up to try and stop this?

------
lo_fye
They can't lose what they never _earned_.

------
mtgx
Money they weren't supposed to make in the first place. This is just market
correction.

~~~
yen223
Exactly. The headline should read "Consumers set to save $54(?) billion by
2016".

