Why telcos should fear Twitter

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.
Written by David Braue, Contributor

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?

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