One revenue stream with massive margins is almost dead! Tougher times for mobile carriers!

An article published in WSJ states that the rise of texting apps like Line and WhatsApp has taken away $23 billion in revenue from mobile carriers!

The business of texting (SMS) when started was free as at that time the carriers (mobile service providers) had no clue how to monetize it !
When they did figure out eventually they squeezed humongous margins (sometimes up to 2000%). Things could not be better till messaging apps like WhatsApp, Line On and many others entered with free or almost free service.

Entry of these players were particularly bad for RIM now known as BlackBerry. I find it rather funny when folks at BB keep harping about BBM (Black Berry Messenger – their proprietary messaging service) being the next best thing after sliced bread !It may be safer but how many of us need that kinda security good enough for the US government for our daily chats?

These new breed of messaging apps have also started nipping away at social media giants like FB..Sharing photos or video is lot more convenient with out having to worry about security or privacy settings of “FB Wall” etc.

Point to be noted is that all these players in trouble are top notch tech giants caught napping by these nimble start-ups…

Makes me wonder whose job was it to track this – Marketing or Sales or Risk or Technology (CIO) ?

2 thoughts on “One revenue stream with massive margins is almost dead! Tougher times for mobile carriers!

  1. Telcos were busy fighting with competitor’s or government for spectrum. Or they were busy luring customers with attractive plans or new technology service like video calls, roaming service, security services, free talk time services… In mean time many small ventures monetize on their empty pipes with competitive apps that challenged their own biz. Does this mean tech entrepreneurs outsmarted traditional entrepreneurs or they didn’t see data sunami wave coming… San puts it well no carrier had a department eyes on data apps carried voice n emotions …

    1. Many thanks Murali.
      What peeves me most is that telcos in India had several advantages that they all failed to leverage:
      – No legacy technology baggage like those older players based in the developed economies.
      – India base, where the world comes (including Huawei) for low cost R&D.
      – Humongous underserved market with increasing affordability

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