Facebook’s purchase of WhatsApp does a good job of showing just how much the wireless carriers failed to capitalize on messaging. It was their game to lose, with SMS built in as the default messaging client on just about every phone. If they had drastically lowered their prices, they could be where WhatsApp is today. Instead, a new report from Ovum Ltd. shows just how much carriers are losing each year to alternative messaging clients.
The latest report, according to Bloomberg, shows that wireless carriers lost $33 billion in texting fees in 2013, and that number is expected to climb to $54 billion in 2016. That’s got to hurt.
What makes it worse is that the carriers may have been able to prevent this. Part of the reason WhatsApp has not been as popular in the United States is because most American carriers offer unlimited texting. But this still comes at a price that is almost certainly more than the $1 per year that WhatsApp charges. As a result, Bloomberg reports that U.S. SMS revenue is expected to decline by 3% to 4% this year.