Why telcos should fear Twitter

Why telcos should fear Twitter

Summary: SMS may have turned into a cash cow for the world's telcos, but Twitter's growing popularity gives customers an easier, cheaper option that may force carriers to come to the party or risk missing out.

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World-changing technologies come around every day, but most of them fall by the wayside because too few people actually care.

(Credit: Twitter)

Not so for Twitter, however, which after a slow-but-steady start is becoming a Web 2.0 giant that should scare the pants off of telecommunications company executives.

With Twitter, if you are not familiar with it, you build a list of friends whose "tweets" — updates — you will follow, and they choose to follow you. To contact them, type your thought into a Twitter client — which might be running on your desktop PC, your mobile phone or anything at all that can surf the web — and it's sent to everybody on your list.

Each message is limited to 140 characters, slightly less than your average SMS.

If brevity doesn't yet seem like a web-killing feature, consider a more-popular alternative: RSS.

Late last year, I decided to get highly organised and set up an RSS client to bring me up-to-date news flashes from a broad range of sources. The idea was to ease information-gathering — but as I added more and more feeds, the number of unread messages soared past 1,000 within days; I quickly realised it was unsustainable.

My newsreader icon is still there, but I'm frankly scared to click on it lest I be reminded just how much information I haven't yet read.

I'm not the first to suffer RSS overload, and I won't be the last. But the experience honed for me the point that it's very hard to keep up — and that anything that makes it easier deserves a look.

I am reminded of T.S. Eliot's statement that "if I had more time, I would have written a shorter letter". By limiting people to a fixed number of characters, Twitter encourages economy in thought and writing.

There's little room for description, embellishment or fluff — just the cold hard facts, paired with a link for people that want to know more (Twitter has, parenthetically, finally provided raison d'etre for URL-shortening services like TinyURL).

ZDNet's own Renai LeMay (@renailemay) has become a prolific Twitter-er over the past few weeks, using his feed to promote breaking news on the site. Indeed, Australia's entire IT journalism community has gone agog over Twitter this year, because there is a consensus that it is an important enough communications channel that it deserves the attention. And we are not, generally, an easily impressed bunch.

Likely to be far less impressed are the world's carriers, which have built SMS messaging into a significant cash cow that has softened the impact of plummeting revenues from landlines.

users will bypass SMS altogether by using feature-rich Twitter clients on their phones

It wasn't too long ago that we could only send SMSes to people on the same network, but times have changed — and quickly. Recently released figures from messaging company Acision hint at just how big this is: over the festive season, we are told, Australia's 21 million mobile subscribers sent 153 million SMSes during the Christmas-New Year period alone — a 57 per cent growth over the same period in 2007-2008. Across the Asia-Pacific region that number sat at around 6.36 billion messages.

These volumes translate into big-time cash for carriers: Telstra, for one, carries over 20 million SMSes on an average day. Estimate a cost of, say, 20 cents each, and you're talking about $1.46 billion in revenues in an average year — for one carrier, not allowing for exceptional peaks. This is critical revenue, especially since carriers have struggled to boost non-SMS data usage.

Twitter is racing towards its 1.2 billionth tweet and carries over 200,000 tweets per hour during peak times (Popacular offers a tweet counter and Twitter offers some interesting usage stats). I know there are lots of random tweets and people exploring its novelty, but there is a growing hardcore base of devoted early adopters.

Twitter is really onto something here — a precious combination of interesting technology and critical mass that is required to succeed on today's internet. As more and more people catch on to Twitter, I think it will become a mainstream way of distributing information. It's RSS played by the rules of SMS, if you will, and a ubiquitous form of communication that can link people using desktops, mobile phones and other devices in amazing new ways.

Say you're organising a coffee with friends. With SMS, you'd have to send (and pay for) one SMS for each person — and, if your phone doesn't allow sending an SMS to multiple recipients, go through the steps of creating a new message for each one. With Twitter, you simply tweet "coffee at the usual place, 11:00, see you there" and all of your friends have the invite. And you've paid ... nothing.

This will not go over well with carriers, who years ago perceived the threat from internet VoIP and even tried to get it declared illegal. VoIP, after all, removed the idea that phone calls were discrete, chargeable things and instead carried them as drops in the ocean of internet bandwidth.

These days, VoIP is mainstream, common technology that has contributed to the decline of fixed voice revenues. Twitter will hardly make mincemeat of carriers' SMS cash cows overnight, but I do think we'll start to see changing usage patterns as smartphone users get in on the act and Twittering becomes second nature.

It's important to note that Twitter has provided SMS integration from its early days: users can SMS a certain number and, until it became financially unviable last August, Twitter would send incoming personal tweets to them via SMS.

This sort of gateway strategy is a good way to get people used to a new service, but over time more and more users will bypass SMS altogether by using feature-rich Twitter clients on their phones instead of SMS. Since tweets are necessarily short, Twitter won't eat up even modest bandwidth limits like RSS or other data services. Twitter offers the same person-to-person private messaging, with group broadcasting and subscription services built right in.

Will the carriers take the same head-in-the-sand approach with Twitter as they did with VoIP? Such a move could be at their peril in the long term: Twitter may still be new, and it may have its own idiosyncrasies and issues, but it has caught on like few new technologies have. Carriers may be enjoying the additional SMS revenues from Twitter-ers now, but as users catch on, those revenues may well go the way of the landline.

Do you Twitter? Why or why not, what do you do with it, and how has it affected your SMS usage?

Topic: Social Enterprise

About

Australia’s first-world economy relies on first-rate IT and telecommunications innovation. David Braue, an award-winning IT journalist and former Macworld editor, covers its challenges, successes and lessons learned as it uses ICT to assert its leadership in the developing Asia-Pacific region – and strengthen its reputation on the world stage.

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9 comments
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  • SMS for important or urgent messages

    I have always been a small time user of SMS, but yes Twitter is replacing it for unimportant chat. However, if something is important or urgent I will still use SMS because I feel more confident that it will be read immediately. I know from my own Twitter use that messages can remain unread for quite sometime and even be missed altogether if I happen to receive a lot of tweets.
    anonymous
  • I agree with above commenter.

    Some @replies messages get lost esp when one follows a lot of tweeters.

    I think Twitter is great for people who want to discover news, its great for disseminating news and information.

    And there's a lot of interesting possibilities, but I dont think it can replace SMS for quite the same reason, mobile instant messaging can't/didn't/hasn't replaced SMS to date - unubiquitous internet coverage, too high internet charge rates, and perhaps also the number of smartphone USERS out there havent reached critical mass figures yet.

    Yes, this might change in a few years. But for the moment, I think a more pressing question (for me at least) is how is Twitter monetising their app? Any ideas?
    anonymous
  • Twitter Not Replacing SMS

    I think part of the reason I read SMS messages and not all tweets is because someone paid to send me the SMS. There is value in the person wanting to contact me.

    We can send email for free and yet people still post letters. I don't see Twitter replacing the SMS.
    anonymous
  • So the money is the difference

    I haven't written a letter in years. Which reminds me... But I know what you mean.

    So Twitter is like the junk mail that goes in everybody's mailboxes, and SMSes are like Express Post because we pay a little more to know they'll get there. Good point.

    Do we even think about the cost of SMS anymore?

    There certainly is a low signal to noise ratio with Twitter, and getting lower as more and more people join up. This is one of the problems I've certainly noticed with Twitter -- will it become a victim of its own success as too many people get too many followers and tune out to the noise and feeling of impersonal contact? This is indeed one of its major weaknesses.
    anonymous
  • Twitter

    Great article, not sure if its totally replacing SMS. The problem is in Australia, the data charges are pretty high up there.

    We have been amazed at the increased growth of Twitter. A few of us started an Australian Technology Podcast (http://instantiatepodcast.com) and received a lot of followers from Australia on our Twitter account - http://twitter.com/instantiate

    There has been a big jump of Australian twitter users over the last few months..
    anonymous
  • I've Fortunately Been Able To Watch Twitter's Blossom

    I've been on Twitter since back when few of us even understood exactly the point of it. It's interesting that the actual "purpose" of Twitter has actually changed, evolved and brought so many surprises. I never imagined so many tools would be created for one API based tiny blog collection (really isn't that it?). Full on applications for everything from Linux to iPhones to Screensavers and beyond. All accessing Twitter's simple content. When I signed up long ago, I really didn't even know if I'd stay with it. I think I neglected it for a few months before trying it out (having started two blogs and yet to complete even a second entry...that is, besides my Tweets via feed, LOL). Strangely, a commitment 'phob it appears, but when it comes to my virtual posting relationships. Anyway, I applaud Twitter for its a) *luck* and b) ability to stick to it long enough. Long enough to aid in the discovery of new FUN tactics and methods to apply to our world of interweb communication. ;)
    anonymous
  • IRC is still good for some things

    Real time chat is still a better tool than Twitter or any other online technology for that matter when you want to make arrangements with mates and acquaintences. It might be old fashioned but it is still one of the most robust yet lightweight communications mediums on the Internet.
    anonymous
  • Presence

    The concept of presence on mobiles will be the true transformational concept. Twitter is a manifestation but it will go far further.
    anonymous
  • Twitter won't replace SMS. But Fring/Nimbuzz will!

    Twitter is a way to broadcast messages to everyone, or to one. But its messy trying to have a conversation. Its also VERY public. So, do what I do to replace (or at least reduce) SMS - FRING (fring.com). Tiny software that runs on my mobile (mine is a nokia but it runs on many different handsets). It has its own built-in chat client, but also seamless linking to Skype, MSN, yahoo-messenger and even the good old ICQ! Oh, and Twitter, and Facebook. And best of all, it even has a built-in SIP client so you can VoIP on your phone and save on calls too!

    Data usage - 12Mb per month in "standby" and 12Mb per hour in a voice call. Chat will be somewhere between. Not expensive on a low-end data plan (say 1Gb), ceertainly cheaper than SMS especially if your friends use it too!

    The only downside, battery life during a chat or call - even when using text chat it is the equivalent of "talk time" for your battery.

    BTW Fring and Nimbuzz (nimbuzz.com) are very similar, if your handset won't work with one, try the other.

    An exetel $5 + 1.5c/Mb plan from seeknbuy.com.au is perfect for this type of usage!
    anonymous