People in the United States are using text messages less because of the increasing access to Internet-connected smartphones, according to a report released by independent telecommunications analyst Chetan Sharma and covered by CNN.
Revenues collected from text messaging were down in the third quarter for the first time in the history of text messaging. Cellphone customers sent an average of about 675 messages per month in the third quarter and about 700 per month in the prior quarter.
Smartphones allow users to send messages to other smartphone users on applications such as Microsoft’s (NASDAQ: MSFT) Skype, Google (NASDAQ: GOOG) Voice, WhatsApp and Facebook (NASDAQ: FB) Messenger. The applications can send messages by using the customer’s existing data plan, and customers don’t pay a fee per message.
Many smartphones now come loaded with free text message services such as Apple’s (NASDAQ: AAPL) iMessage.
Text messages can be a significant source of income for cell phone carriers. According to the report, text messages generally max out at 160 bytes, so the standard 20-cents-per-message plan costs customers about $1,250 per megabyte.
Last year, text messages made up 19 percent of wireless carriers’ data sales for contract customers, according to PricewaterhouseCoopers, a consulting firm.
Wireless providers have introduced new plans recently that help address the decline in text messaging. AT&T (NYSE: T) introduced shared data plans that bundled unlimited talk and text messages, allowing the customer to choose the amount of data they prefer. Verizon’s new plan is very similar, except customers must switch to a data-share plan if they upgrade their plan or have an Internet-capable device.