iMessage & Facebook Cause First Decline in U.S. Text Messaging

Text Message U.S. Decline iMessage

The third quarter of 2012 saw mobile text message usage decline in the United States for the first time, according to independent mobile analyst Chetan Sharma and reported by The New York Times. Both the number of text messages and carrier text message revenue declined due to internet-based alternatives.

According to Mr. Sharma, the average U.S. mobile subscriber sent 678 text messages per month in the third quarter of 2012, down slightly from 696 per month in the second quarter. The decline is small, but significant, as the number of text messages sent by the average U.S. mobile subscriber has grown steadily in the years since analysts began to track its usage, before appearing to peak in the third quarter.

Text messaging has already peaked in developed European and Asian markets where mobile data networks and services are more advanced, but the U.S. has, until now, resisted the change. Internet-based alternatives to traditional SMS and MMS messaging, such as Apple’s iMessage service and Facebook, have become available to a large number of U.S. users, and are likely to blame for the decline. The increase in smartphone marketshare, which allows users to access these alternatives, also played a part.

U.S. carriers, which for many years derived significant revenue from arguably overpriced text messages, appear to have begrudgingly accepted the decline of text messaging and have adjusted their service strategy accordingly.

Smartphone plans from major carriers now often feature “unlimited” minutes and text messages and instead focus their tiered pricing on data usage. This switch has allowed carriers to maintain solid profits, even as the mobile market continues to evolve. Illustratively, nearly half of the carrier revenue earned from each customer — 45 percent — now represents the cost of a data plan according to Mr. Sharma’s report.

While concerns over unfair pricing or access are alive and well in the mobile industry, the broader shift to data neutral usage and pricing offers a fairer and simpler arrangement, an arrangement that U.S. carriers appear to be on the verge of fully accepting.

Teaser graphic via Shutterstock.