Chat apps have overtaken SMS by message volume, but how big a disaster is that for carriers?
There's a reason why mobile carriers are scared of third-party messaging apps such as WhatsApp, and here it is: people are now sending more messages over these services than they are text messages.
Context & Ripple Effects
The crossover follows an earlier warning that texting was cooling as a carrier growth engine in 2011. WhatsApp had already been profiled as a quietly growing messaging titan, and reported more than 200 million monthly active users in April 2013.
The significance is not merely traffic scale: WhatsApp’s subscription-led, ad-free model shows that a messaging service can build a direct relationship with users while conversations travel over the carrier’s data network rather than its SMS product.
First-order effects
- Mobile carriers lose SMS’s position as the default measure and delivery channel for person-to-person messaging, while chat-app providers capture more of that activity.
- WhatsApp’s reported daily message volumes and 200 million-plus monthly active users strengthen its position as a scaled alternative to carrier text messaging.
Second-order effects
- Carrier SMS pricing and bundles become less effective as tools for retaining messaging users when the same contacts can be reached through third-party apps over data.
- WhatsApp’s paid-subscription approach tests a user-funded messaging model that does not depend on advertising or carrier SMS charges.
Third-order effects
- If message volume continues to move to apps, carriers’ role in messaging shifts toward providing connectivity, while the customer-facing conversation layer sits with software providers.
- The transition concentrates the strategic value of messaging in services that own contact networks and user relationships rather than in the SMS standard itself.
The trend: Consumer messaging is moving from operator-controlled SMS toward internet-based apps that own the user relationship atop mobile data networks.