textually.org: Text-messaging profits draw competition – and regulators

textually.org: Text-messaging profits draw competition – and regulators: “Text-messaging profits draw competition – and regulators Soon after text messaging appeared 15 years ago, experts began proclaiming that the simple service would rapidly be replaced by more intricate options. Yet texting is still here, and growing, and by some estimates generates $60 billion a year in revenue for cellphone operators around the world. The IHT reports. ‘Now large Internet companies like Yahoo and Microsoft as well as small start-ups are looking to grab a piece of the text-messaging bonanza, and they could soon threaten one of the main sources of revenue for the world’s cellphone operators. … There are also dozens of lesser-known Web sites that bypass the cellphone operators and let users send text messages for free from computers to cellphones. But more threatening could be software that allows free or cheap cellphone-to-cellphone texting. ‘Texting is a cash cow for the operators, so they’ll try to block these services from being used on their networks if they become popular and eat into revenue,’ said Niek Van Veen, an analyst at Forrester Research in London. ‘The threat is there, but it’s not immediate because not many consumers have the right cellphones and not many use the Web and download applications anyway.’ Operators get, on average, 20 percent of their revenue from text messaging, according to Van Veen. In 2010 about 2.3 trillion text messages will be sent worldwide, generating $72.5 billion for the operators, according to forecasts released last year by Gartner Dataquest. Most of that turns into profit, because the profit margin on text messaging hovers around 90 percent, more than double what operators get on voice services.’”