Business, Media, Sci-Tech

Facebook Messenger takes on SMS

By Mandy De Waal 11 August 2011

This week Mark Zuckerberg’s little social marketing project launched a mobile app set to give SMS a swift kick in the pants. In reaction local mobile network operators yawned, saying they’ve seen and heard it all before. By MANDY DE WAAL.

Facebook has mashed all its messaging products into one mobile application called Facebook Messaging which, market pundits and analysts believe, could cripple SMS via cellphones.

Analysts say Facebook’s massive reach and the affordability of this solution will see Zuckerberg’s social network giving mobile operators a run for their money. The app is free and the end-user fee is the data cost paid to a mobile service provider, which is minor in comparison to the cost of sending an SMS.

Global tech media heavyweights, TechCrunch reported on the initiative saying Facebook Messenger was “genius”, would prove to be “another long-term thorn in the side of SMS” and declared that “SMS is more screwed than ever”. A cross-platform messaging solution, Facebook Messenger was launched in the US on Tuesday, and is said to be expanding to other territories shortly.

Available on Android devices and iPhones, Messenger integrates Facebook messages and chats so that everything is neatly organised in one place on the user’s smartphone. The technology for this service was created by Beluga, a mobile messaging company created by ex-Googlers acquired by Zuckerberg Inc in March. This was a smart play by Facebook, who has been itching to play in the smartphone domain. There are about 750 million users of the social networking site, but of that 200 million access Facebook by smartphone.

What’s distinctive about the Beluga messaging solution is the creation of “pods” (think Google+ huddle) where you can communicate or short message a group of buddies, show them pictures, share locations and engage in a closed chat that’s very similar to a chat room.

Small wonder Facebook snapped the company up even though it was only eight months old. This kind of tech could be just what Facebook needs to pull its communications out of the inner recesses of that social networked labyrinth and into a one-touch application that appears to be a lot more user-friendly and accessible.

The unanswered question is whether this nifty little app will destroy SMS as we know it. Every year or so there’s a killer app that’s supposed to come along and wipe out that lucrative cash cow that serves mobile service providers so well.

Remember the Skype messengers of doom? And what about Twitter or WhatsApp? Even MXit didn’t do that much market damage and SMS revenues are more healthy than they have ever been, says Chris Ross, managing executive of commercial development for Vodacom.

“I am not sure why everything thinks that they will destroy SMS when SMS has been such a relevant part of our lives,” says Ross who’s heard that “new killer app as apocalypse now for SMS” story before.

In fact, he finds it all a little amusing given that Vodacom’s revenues from SMS are doing very nicely, thank you very much. In 2009 Vodacom made some R2.8 billion from SMS, which rose to R3 billion in 2010, and increased to R3.2 billion for the financial year ending March 2011.

“We’ve seen the arrival of BlackBerry Messenger together with a host of other solutions that claimed they were going to have an impact on the SMS business, but still we continue to see revenue grow so the predictions of death that we’ve heard about just don’t seem to be playing out,” Ross says, his tongue firmly in his cheek.

Smartphones continue to do incredibly well abroad as well as in South Africa which recently saw the launch of more affordable devices positioned under the R1,000 mark, for the first time.

Vodacom says that a quarter of all the devices sold for their financial year ending March 2011 were smartphones. Expressed as a number, that’s about 8.1 million devices. Despite the rise of smartphones with a variety of IM services, mobile operators believe consumers are communicating more, rather than switching from one service to another.

“SMS is so ubiquitous, and is an overarching service. Businesses use it to communicate with customers, it is used for security, for banking purposes, and there’s the convenience of anonymity with SMS. You don’t have to be friends with someone to send them an SMS.”

The “please call me” service offered by mobile networks locally remains incredibly popular. Vodacom says about 600 million of these are sent monthly.

“What social networks like Facebook are doing is increasing the number of communications that happen. Apps like Facebook Messenger, WhatsApp and BBM just give people a different way to communicate, and people are communicating a lot more than they used to because it is accessible and affordable.”

CellC concurs with this line of thinking. Simon Camerer, executive head of marketing at CellC, said, “The business of communication is constantly evolving and with the technological change we experience in this industry, this is set to remain the case. We have seen a lot of IM-like products entering the market, in South Africa, the MXiT and the BBM phenomena continue to engage consumers. We have not, however, seen these products kill SMS. Indeed, we believe SMS is a core communications tool for millions of South Africans and will remain so. SMS is also a key information-sharing tool in the corporate (mobile banking) and SME sectors (telemetry), so we still think there is lots of life left in SMS.”

Nice try Zuckerberg, but this is Africa and your high noon for killing off SMS isn’t going to happen just yet. At least not until Google+’s huddle takes off in a big way and Apple introduces iMessenger. DM


Join the counter-revolutionary expansion movement. iMaverick.


Read more:

  • Facebook Just Out-iMessaged iMessage — And SMS Is More Screwed Than Ever on TechCrunch;
  • Facebook launched Messenger app in Financial Times;
  • App of the Week: Facebook Messenger on TechLand in Time;
  • Facebook Messenger app challenges cell carrier ‘control’ on CNN
  • Leaked: Facebook Messenger to get video calling on ZDNet.

Photo: Two iPhones with Facebook Messenger, courtesy Facebook.

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