Start-Up Tries Free Texting in India
NEW DELHI—A service called SMS GupShup is winning the race to become India's version of Twitter by promoting social networking through text messaging on cellphones. But it faces a challenge: It can't afford to be too popular.
Context & Ripple Effects
Two years ago, SMS-based apps on Facebook found little real use, which read then like evidence that text-messaging was a dead end for social software. SMS GupShup's New Delhi bet inverts that conclusion: instead of treating SMS as an accessory to a web product, it makes the text channel itself the social network, aimed at Indian cellphone owners who live on prepaid feature phones rather than the mobile web.
The timing matters because Twitter — the model SMS GupShup explicitly chases — was just posting its highest usage day ever in January 2010, even as third-party measurements suggested (unconfirmed) that its growth might be flatlining. A text-native clone has a structural argument in India, where per-message carrier costs, not user interest, are the binding constraint.
First-order effects
- SMS GupShup's economics invert as it grows: every new user adds carrier termination charges for messages the service gives away free, so the WSJ's 'can't afford to be too popular' problem hits the company's cash position immediately, not at some later scale.
Second-order effects
- Twitter and other web-centric social networks face a forced choice in India — build out SMS gateway partnerships and eat per-message costs themselves, or concede the feature-phone majority market to a text-native rival.
Third-order effects
- If sponsor-funded free messaging proves viable, social networking fragments by access infrastructure: emerging-market products optimized around SMS and prepaid handsets coexist with, rather than lose to, smartphone-first incumbents — and carriers re-emerge as gatekeepers whose pricing decides which social platforms survive.
The trend: Social networking is splitting along access infrastructure, with SMS-first challengers serving feature-phone markets that web-built incumbents treat as an afterthought.