The U.S. is Texting, not Talking

October 13, 2008

Nielsen Mobile released a survey recently suggesting that American mobile phone users are actually texting more than they are talking. According to Nielsen, in Q2 2008 U.S. mobile subscribers sent & received on average 357 text messages per month (that’s 11+ text messages a day) versus making 204 phone calls a month.

What I find so remarkable about this surge in text usage in the U.S. is that the cost associated with texting only continues to increase. In fact, in the past two years the cost for sending & receiving text messages without a *special* text message plan has increased by 100%. Without one of these *special* text messaging plans, the consumer is paying $0.20 for each individual text message that is sent & received. The reason why texting is so popular in the Philippines (the text messaging capital of world) for example is because the cost of a text message is less than a penny & the mobile subscribers in the Philippines simply can’t afford to make phone calls. Europe provides another good example of a consumer base that heavily texts, but again, Europeans text in an effort to avoid high roaming charges between countries.

So with the costs of text messaging rising here in the States, why & where is the increased volume coming from? Not surprising to most parents – it’s coming from teens. Teens 13 to 17 years old on average sent & received about 1,742 text messages a month or 58 text messages a day! A surprising statistic to me was that kids under the age of 12 are also heavy text message users. These pre-teens send on average 428 text messages a month.

I forecast that even with the costs of text messaging rising, (which they are -see Verizon’s notice from last week about hiking their fees for mobile-terminated messages) that the popularity of text messaging will continue to increase here in the States. Not only will our teen population continue to send more text messages, but the enterprise world is continuing to adopt & deploy more mobile marketing campaigns with the help of SMS gateway providers such as Clickatell.

Brian Kirk
VP Business Development
NetworkIP & Jaduka


Contactless & Mobile Technologies at the Presidential National Conventions

September 3, 2008

Last week’s Democratic National Convention (DNC) was interlaced with contactless & mobile technology from beginning to end.

First Data kicked the convention off by introducing their new GO-Tag; an innovative electronic sensor that is small enough to transform any device into a contactless payment solution. The GO-Tag which was distributed in the form of a small button at the DNC allowed the 5,000 lucky journalists & delegates who received them the ability to “purchase” free snacks & drinks by tapping their GO-Tag button on electronic sensors at concession stands installed throughout Denver’s Pepsi Center. In a recent BusinessWeek article, Michael Capellas, First Data’s CEO, is placing a major bet on the fast-emerging world of mobile electronic commerce. According to the article, the GO-Tag project is one of five new ventures that Capellas has launched since he took over First Data. The other four projects include information analysis, customer-loyalty programs, fraud detection, & consumer-behavior prediction. The article went on to say that Capellas believes that mobile commerce could add more than a $100 million to First Data’s revenues in 2009.

Then there was Senator Barack Obama who announced Joe Biden as his vice-presidential pick with a text message. Nielsen Mobile described this text message based ad campaign as “the single largest mobile marketing event in the U.S., to date.” Nielsen estimates that 2.9 million U.S. mobile phone subscribers received the text message launched by Obama’s campaign. Obama supporters can still sign-up for future text messages from Obama’s campaign by texting “GO” to short code 62262 (spells OBAMA). Supporters can even subscribe to specific types of information updates by texting specific keywords such as “HEALTH”, “EDUCATION”, etc. For more information about Obama’s mobile campaign you can visit Obama’s web site & while you are there you can even download wallpapers & ring tones for your mobile phone too.

Delegates attending both the Democratic & Republican National Convention also made good use of their mobile phones for communicating events from the convention. They sent & are continuing to send text messages to services such as Twitter which in-turn distributes these messages from the convention to their “followers”. These same people are also shooting short video, audio, & taking pictures with their mobile phones & then uploading them to their blogs as mobile blog entries (“moblogs” for short).

These are just a handful of examples on how contactless & mobile technologies are being used in larger scale mediums such as our current presidential election & more importantly these two technologies are increasingly becoming a part of our everyday landscape.

Text Messaging Fees Equal Profit Center

July 2, 2008

T-Mobile announced that they are increasing their text messaging fee from 15¢ to 20¢ a text message. The rate increase will go into effect on August 29th & will only affect those consumers who do not have a text messaging plan in place. T-Mobile is simply joining ranks with the likes of AT&T, Verizon Wireless, & Sprint who already have increased their text messaging rates to 20¢ a text message.

It was only a year ago when these same providers increased their rates from 10¢ to 15¢, While any price hike should frustrate consumers; what’s frustrates me most about this increase is that as services become mainstream they usually go down in price, not up. The providers have been raking the consumers over the coals for years now on text messaging fees. I can remember when text messaging was 5¢ for sending a message & incoming messages were free. Now it costs me 40¢ to message someone to tell them I’m running ahead of schedule & for them to acknowledge my text.

This price increase by T-Mobile will inevitably force those users who haven’t already signed up for prepaid text messaging plans to do so now. Domestic only text messaging plans offered by T-Mobile include $4.99 per month for 400 messages, $9.99 for 1,000 messages, & $14.99 for unlimited messages. Of course these plans offer a much better rate assuming the user actually sends this many text messages. Many consumers will simply sign up for one of these plans just because they’d prefer to know what they will be charged at the end of the month versus worrying about how much 20¢ a text message will add up to. Regardless, the service providers stand to make a hefty profit on text messaging & will continue doing so until Smartphones become more ubiquitous & chat applications are introduced.