'Joyn' Messaging Service Designed By Telecoms To Fight Free Texting From iMessage, Facebook Messenger
Just past the security gate for the world's largest cell phone trade show in Barcelona, executives of big mobile carriers can't avoid walking past a booth they would probably rather not see: It's for "Pinger," a small California company that offers free texting in the United States and Germany and has global expansion plans.
Pinger – along with an explosion of smartphone messaging services like iMessage, BlackBerry Messenger, WhatsApp, Viber Media, Facebook Messenger and KakaoTalk – have managed in just a few years to slash away at the important revenue that cell phone companies get from text messaging, and analysts say there's no end in sight to the financial blood letting.
They do it by offering messaging applications that let phone users chat for free on the carriers' data networks or Wi-Fi. Some, like Pinger, make money from advertisements and work on computers as well.
The London-based Ovum research firm estimates telecommunications companies lost nearly $14 billion last year in text-messaging revenue as consumers migrated to applications allowing them to send messages over cell phone data networks.
Ovum said the companies still took in an estimated $153 billion, but that was down 9 percent from a year earlier, and Pinger co-founder Joe Stipher wants to reduce the amount even more.
"Text messaging is free, and calling is going to be free," said Stipher, wearing jeans in contrast to the dark suits favored by thousands of cell phone company executives attending the four-day 2012 Mobile World Congress that ended Thursday. "Data is going to be like electricity or water, not totally free, but do you worry about giving someone a glass of water at your home or letting them plug in? No."
Needless to say, mobile companies are not happy at the flood of free messaging services piggybacking their networks. Telecom Italia SpA chief executive Franco Bernabe told MWC that free messaging services are undercutting the ability of phone companies to invest in their networks. Paid texting, or SMS, has been a cash cow for phone companies that uses minimal network capacity.
The new "players have based their innovation in the mobile domain, without a deep understanding of the complex technical environment of our industry. This is increasingly creating significant problems to the overall service offered to the end user and driving additional investments for mobile operators," Bernabe said.
Pinger – along with an explosion of smartphone messaging services like iMessage, BlackBerry Messenger, WhatsApp, Viber Media, Facebook Messenger and KakaoTalk – have managed in just a few years to slash away at the important revenue that cell phone companies get from text messaging, and analysts say there's no end in sight to the financial blood letting.
They do it by offering messaging applications that let phone users chat for free on the carriers' data networks or Wi-Fi. Some, like Pinger, make money from advertisements and work on computers as well.
The London-based Ovum research firm estimates telecommunications companies lost nearly $14 billion last year in text-messaging revenue as consumers migrated to applications allowing them to send messages over cell phone data networks.
Ovum said the companies still took in an estimated $153 billion, but that was down 9 percent from a year earlier, and Pinger co-founder Joe Stipher wants to reduce the amount even more.
"Text messaging is free, and calling is going to be free," said Stipher, wearing jeans in contrast to the dark suits favored by thousands of cell phone company executives attending the four-day 2012 Mobile World Congress that ended Thursday. "Data is going to be like electricity or water, not totally free, but do you worry about giving someone a glass of water at your home or letting them plug in? No."
Needless to say, mobile companies are not happy at the flood of free messaging services piggybacking their networks. Telecom Italia SpA chief executive Franco Bernabe told MWC that free messaging services are undercutting the ability of phone companies to invest in their networks. Paid texting, or SMS, has been a cash cow for phone companies that uses minimal network capacity.
The new "players have based their innovation in the mobile domain, without a deep understanding of the complex technical environment of our industry. This is increasingly creating significant problems to the overall service offered to the end user and driving additional investments for mobile operators," Bernabe said.
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