Sprint Hikes Text Messaging Fee Again, Should Drive Industry-Wide Data Revenue


Sprint Nextel is increasing its “casual” text messaging rates by one third, to 20 cents per message sent/received, RCR Wireless News reports. The new rates start Oct. 1; expect the other big wireless carriers to follow suit — as they did less than a year ago when Sprint was the first to hike rates from 10 cents to 15 cents per message.

This is not a ploy for pennies, but an aggressive push to get more subscribers to sign up for monthly text messaging plans, which guarantee carriers revenue whether people text or not. Texting is by far the most popular wireless data activity — about 40% of U.S. wireless subscribers text, according to research firm M:Metrics — and carriers are smart to cash in on the habit. Any subscriber who texts with any frequency is now better off adding a $5-per-month, 300-message plan to their account — the same cost as sending or receiving 25 “casual” texts per month.

Data revenue from services like text messaging, Web surfing, ringtones, and mobile TV are key growth areas for carriers, whose revenue from phone calls is dropping.

Update: Yankee Group estimates 21% of U.S. mobile customers subscribe to monthly text message bundles. We expect that percentage to grow this fall as Sprint (and likely other carriers) juice per-message rates.