Smartphone users are spending more time hanging out on Facebook and thus left with less time to shoot texts to each other.
For years, mobile operators around the world have been living large off the high traffic of SMS traffic. But the salad days are coming to an abrupt end because of a change in user behavior that ought to leave Mark Zuckerberg quite pleased.Many operators are increasingly losing SMS customers to Facebook, according to a research note put out Friday by telecommunications consulting firm Strand Consult. This is a simple zero-sum game in which smartphone users are spending more time hanging out on Facebook and thus left with less time to shoot texts to each other.
Of the more than 800 million people around the world using Facebook, Stand Consult says that over 425 million of them access the social network on their mobile phones. Measuring by minutes of use, the report says that Facebook "probably transports more mobile traffic, number of messages and time spent online than the world's largest operator."
People who believe that Google is currently the biggest threat to mobile operators may not realize exactly how much time mobile customers are using on Facebook and how Facebook is currently changing the way over 800 million people communicate on a daily basis. The biggest difference between Facebook and Google is that Facebook is a communication tool that people use to keep in touch with their family and friends every day.
In many ways one can compare Facebook's development in the mobile industry to how the Internet affected the media industry. Market players like Google, Skype, Twitter and MSN are only marginally important to the mobile industry compared to Facebook.
The question is whether operators can do anything to limit the damage that Facebook is making on their cash flow? Is there any way that mobile operators can retain their SMS revenue even though customers are using Facebook to communicate?
Although more of the carriers' customers -- led by countries like Denmark and Norway -- are moving their communication over to Facebook chat or Instant Messenger, Strand Consult still says one way to stem the decline would be to sell SMS as a flat rate product. In Denmark, for example, it found that customers pay a flat rate SMB subscription as part of the mobile data package they buy.
"This has resulted in almost all Danish mobile customers purchasing a SMS package every month as part of their mobile subscription, without questioning whether they need it and also without worrying about how many or few SMSs they actually send per month -- as they feel their SMSs are "free," according to the report.