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Thursday, May 2, 2013 8:21 PM UTC

Text messaging down across the U.S.

Internet-based applications are starting to eat into phone companies' profit margins

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Topics: Associated Press, Text Messaging, Cell-phones, Apple, ,

Text messaging down across the U.S.

NEW YORK (AP) — Americans are saying CUL8TR to text messaging, a wireless industry group says, as Internet-based applications such as Apple’s Messages are starting to take over from what was once a cash cow for phone companies.

CTIA – The Wireless Association said Thursday that Americans sent 2.2 trillion text messages last year, down 5 percent from 2011. That’s still 19 text messages per person per day.

Text messages vaulted into the U.S. mainstream in 2007, despite often costing 10 cents each. Costs came down quickly as phone companies started selling monthly “bundles” of texts. Now, many phone companies give text messaging away for free as part of a plan that mainly meters the amount of data used. That has helped stave off mass migration to Internet chat applications and Facebook messaging in the U.S., making the decline somewhat surprising, said Pamela Clark-Dickson, an analyst with Informa Telecoms & Media in Britain.

In countries where phone companies have kept the cost of text messaging high, the use of chat applications that avoid those fees has exploded. Those apps include WhatsApp and allow people to text other users of the same service for free, using the Internet and bypassing the phone companies’ text systems. Informa estimates that the number of messages sent through such services worldwide exceeded those sent by text last year.

The text message, or Short Message Service, was created in France and Germany in the 80s as part of the specification for the “GSM” digital cellphone standard. The first commercial services appeared in Europe in the 90s. They were slow to appear in the U.S., where the cost of cellphone calls was much lower than in Europe.

Clark-Dickson said text messaging will likely remain popular as a way to communicate with people who don’t use chat applications. In addition, businesses have started using it as a way to communicate with customers.

“At this point, SMS has still got quite a lot going for it,” Clark-Dickson said.

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