There is an explosion of innovation in the mobile chat market. Companies and apps like GroupMe, Badoo, Ning/Mogwee, Yobongo, Textfree, Whatsapp, and others are pushing new features all the time, and mobile messaging is becoming much more interesting than just SMS.
And guess what: The carriers are nowhere. Not an ounce of innovation from the phone companies since they raised the cost of text messages from 10 cents to 25 cents, or whatever they cost now.
We’re not surprised. Mobile chat is becoming about good software, not just access to a network, and carriers have always stunk at software.
The interim good news, perhaps, is that popular mobile chat services could lead to more smartphone adoption and more mobile Internet access subscriptions, which is a growth area for carriers. But that’s probably not going to be as profitable as the SMS plans that these new services will eventually replace.
And while mobile Internet subscriptions are moving to consumption-based models, and not unlimited access, mobile chat isn’t going to move the revenue needle there. That’s where mobile video is going to drive usage and revenue up — and probably not as profitably as SMS has been all these years.
Other potential outcomes: Carriers could try brokering ads in all these cool new apps. Or could do something big in mobile payments. Or they could lower the cost of text messaging and hope it continues to be the go-to, cross-platform “push notification” standard. Or they can buy one of the apps and hope it eventually prints money.
Anyway, it’s probably a good thing for consumers that mobile carriers are becoming more “dumb pipes.” But if carriers still have ambitions to be more, they’d better start innovating quickly.