Larry Magid: Wireless Companies Fight Free Texting Apps

SAN FRANCISCO (CBS SF) – Smartphone apps that take advantage of wireless Internet access to enable free phone calls and text messaging have left major telecommunications companies struggling to recover billions in lost revenue.

Apple iMessenger, Blackberry Messenger and Facebook Messenger all deliver text messages to smartphone users on those platforms without incurring a messaging charge from the cell phone company.

KCBS’ Technology Analyst Larry Magid:

Texting services such as Pinger and Google Voice that bypass the cellular service provider voice and SMS networks to transmit text messages and connect voice calls, even internationally, have also taken a toll on the big players of the wireless industry.

Internet-based text messaging alone siphoned $14 billion from the industry in 2011, according to the London research firm Ovum. Money aside, carriers in the U.S. are struggling with an explosive growth in traffic as more consumers download video and surf the web from handheld devices.

Several large telecom companies announced recently they would fight back with proprietary applications of their own that more fully integrate phone calls and texting with wireless Internet access.

Extracting their pound of flesh will be tricky given that competitors have already found ways to offer that kind of access for free. So expect the next generation of these apps to transform how cell phone and data plans are priced.

(Copyright 2012 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

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