Unlimited Text Applications Could Change Business Model for Wireless Carriers

Once a customers download the application, they receive their own telephone number to text. In addition, chats can be set up between multiple users.  Revenue is generated through both advertising and fees on some of the application's features.

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In fact, people don't even need a cell phone to use textPlus. The service was launched to the public in 2009 and was initially geared toward middle-school aged youths, who had iPods but didn't have cell phones, as a way to connect with friends. But textPlus is now available on both iPods and a wide range of smartphones.

The application has grown tremendously. By the end of 2010, more than 5 billion text messages had been sent on the service. By June 2011, there were twice that many messages sent, and that number doubled once again at year's end; more than 2.5 billion messages were sent in the month of December alone.  

A THREAT TO TRADITIONAL TEXT MESSAGING?

Applications like textPlus could pose a challenge to wireless carriers with their own text messaging services. As IBTimes reported in October, Verizon Wireless brings in as much as $7 billion annually from text messaging -- about12 percent of its total revenue. The company, a joint venture between Verizon Communications and Vodafone of the U.K., charges up to 20 cents for both incoming and outgoing messages unless a customer purchases an unlimited text plan, which costs $20 a month.

Text messaging through wireless carriers is still widespread.  According to a September survey conducted by the Pew Research Center, text messaging users over 18 send and receive an average of 41.5 messages per day. Those between ages 18 and 24 send or receive an average of 109.5 daily text messages.

However, there have been some challenges to text messaging.  For example, Research in Motion's BlackBerry customers have BlackBerry Messenger, or BBM, which allows users to message each other in a mobile chat room without using a wireless carrier text plan but the carrier's data plan instead. Apple in October released its iMessage application, providing similar features for iPhone users.

Programs such as BlackBerry Messenger and iMessage don't work across operating platforms, which means a BlackBerry user can't instant-message an iPhone user.  Therefore, it won't make a lot of sense for avid text messengers to drop that text message service.

However, eventually consumers will want the features of BBM and iMessage to work across different platforms. TextPlus can do just that.

"This has been happening for...several years," independent telecommunications analyst Jeff Kagan told IBTimes, referring to the challenges to traditional text messaging.