Text Messaging Is in Decline in Some Countries
Perhaps to the chagrin of cellphone carriers, all signs point to text messaging's continuing its decline in several parts of the world. — In Finland, there was a significant drop on Christmas Eve, one of the busiest days of the year for texting …
Context & Ripple Effects
Texting has been the mobile industry's most profitable service, and the corpus shows the arc bending: daily message volume hit a reported four billion worldwide by late 2009 (Daily Text Messages Exceed 4 Billion), then by mid-2011 the Wall Street Journal was reporting carriers sweating as texting cools off. This report lands on the same fault line — a significant drop in Finnish texts on Christmas Eve, historically one of the busiest messaging days of the year.
The precedent matters: the ringtone market, another carrier-controlled add-on, was already shrinking back in 2007 (Global Market for Cellphone Ring Tones Is Shrinking), so SMS erosion fits an established pattern of high-margin network services losing their premium.
First-order effects
- Finnish and other European carriers face direct revenue loss on what has been a near-pure-margin product, with the Christmas Eve decline hitting at seasonal peak volume rather than a quiet period.
- Carriers named in the earlier cooling-off coverage now have evidence the slowdown is geographic and structural, not a one-market anomaly.
Second-order effects
- Pricing pressure builds toward bundled or unlimited messaging as carriers try to defend volume, shifting the revenue fight from per-message fees to overall data plans.
- Internet-based messaging alternatives riding on the same networks gain ground whenever SMS pricing stays high, accelerating the substitution carriers cannot block without degrading their own data business.
Third-order effects
- If the ringtone-to-SMS sequence holds, carrier value-added services generally get commoditized into flat-rate data access, leaving operators selling connectivity while third parties own the messaging relationship with users.
- Regulatory and competitive attention could follow revenue migration, since text termination fees and intercarrier arrangements were built for a growth market that several countries are no longer in.
The trend: Carrier-controlled mobile services are steadily being unbundled into cheap data access, with SMS following the same decline path ringtones took before it.