Telia, the Swedish operator, announced to day a fixed price sms package for their customers of $13.50 (£7.30) a month. Their customers can send as many sms as they like for that. Well, up to a fair use maximum of 5,000, which seems pretty reasonable.
While I don’t expect the rest of Europe to suddenly follow suit, it does certainly indicate the way the market is going. Carlo pointed me in the direction of this Textually link announcing a Virgin promotion of 1,000 free texts a month this Summer (admittedly within the Virgin network only) and Orange in the UK are currently offering Pay As You Go customers uo to 1,000 free sms when they top up.
So the cracks are starting to appear in the stalwart sms revenues of the past.
This is bad news for high profile Hotxt, who I wrote about last week. Their subscription of £1 a week for unlimited texting doesn’t look so attractive when compared to Telia’s £1.82, especially when you consider Hotxt can only send messages to other people with their software installed on their phones.
And that’s the problem with a service primarily based on price rather than value - it can always be undercut, especially if the incumbent players start to feel the pain you’re inflicting on them.
Which is why, Hotxt needs to change its model to become extraordinary, remarkable and almost impossible to compete with - free, in other words. How far do you think Skype would have got if they were merely undercutting the telco’s? Their uptake would have been very limited and they’d never have achieved even 1% of the traction.
The price of sms is already falling and all Hotxt might achieve is to make it fall quicker. Which is great for the rest of us, but not so great if you’re a Hotxt investor.
[tags]hotxt, telia, sms, virgin, orange[tags]
[...] Mobhappy has this article about a Swedish operator, Telia, offering unlimited SMS for $13.50 a month. This translates to about 742.50 pesos a month. Local provider Smart has unlimited SMS at 60 pesos per 4 days. This translates to about 250 pesos ($5) per month. Sun Cellular has an unlimited SMS package at 350 pesos ($6.50) per month. Globe’s Touch Mobile also has a 300 pesos ($5.50) per month unlimited SMS package. So, what is so special about a $13.50 per month unlimited SMS plan? Everybody in this country can avail of unlimited SMS (and sometimes voice calls on net) for less. [...]
Great posting !
How times change. I remember when Finnish challenger mobile operator Saunalahti was offering a sign-up package of 1000 free text messages in 2001, and I thought to myself, people will never use them up. But obviously if you send 33 messages per day, you can speed through 1000 messages in a month; and heavy users even here in the UK send from 50 to 100 messages per DAY.
Still, to get through 5000 messages per month, you have to thumb through 167 messages per day, and that is a LOT….
On the other hand, at 13.50 dollars per month (11 Euros) - for young heavy users of SMS text messages, if they currently have some bundle or package at about 6 or 7 cents per message, they can only get some 150-180 messages for that money (5-6 per day). This offer is very appealing for all those who send more than that. And I’d say that is pretty much everybody in Sweden under the age of 30…
Fascinating…
And keep up the detective work, where do you guys find all this good stuff?
Tomi T Ahonen
I know how heavily texters can text! We setup a Free SMS Service a little while ago in order to let users send SMS from the web to phones, anywhere in the world for free. We now have slightly under 20,000 users (pretty much all from the UK) sending thouands and thousands of SMS all the time. Hey, we use an SMS gateway (of course) but at these rates it would actualy be cheaper to get a contract and send them from a mobile!! (Sure it’s againss the TOS though).
And to think, SMS all started as a way for engineers just to test the Telecoms service!