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Chat apps could cost carriers $33 billion in revenue this year

New report claims that third party instant messaging clients like WhatsApp will cost telecom companies a fortune in lost SMS revenue this year. 

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The emergence of third party instant messaging clients for smartphones is not news. With the likes of Line, WeChat and WhatsApp luring in millions of users every day, it is evident that not a lot of users are reliant on text messaging anymore. This in turn hurts the telecom companies which are reliant on SMS and MMS revenues from its customers. A new report now claims that in 2014 alone, telecom companies around the world stand to lose close to $32.5 billion in revenue thanks to mobile IM clients. It is claimed that by 2016, this figure will rise to $54 Billion.

According to an expert with Recon Analytics, the decline began in 2012 with the emergence of iMessage on iPhones. Today, there are several other instant messaging clients in circulation, most of which are being created as we speak right now. This also explains why Facebook took WhatsApp so seriously when it acquired the IM client for a whopping $19 billion.

The carriers however can seek solace in the fact that these chat apps are somewhat restrictive in their approach. While you can send an SMS to anyone on your mobile contact list, sending an instant message with one of these apps is only possible if the person you’re sending it to has the application installed on his/her phone. So this seems to be the only consolation for the carriers at the moment. But the rate at which people are switching to chat apps, carriers can’t afford to take it easy.

Via: Mashable

Valerie Richardson
26 year old tech writer based in London. Have prior experience working with major media conglomerates. I'm also a lover of all things tech. Well, basically anything with a display and a power button on it.

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