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She was popular for sending messages quickly via mobile phone and brought billions in revenue to mobile operators. But in the age of WhatsApp and Co, these revenues are breaking away.

Who needs WhatsApp, where there are SMS and other messaging services? That was the big question when the short message service was founded in 2009. Nobody asks anymore today. Rather, the question is: Does anyone still need the Short Message Service (SMS)?

Everything had started so well. Since 1995 SMS can be sent in Germany. The maximum number of 160-character short messages sent over the mobile network exploded. Its zenith was reached by SMS communication in 2012. At that time, more than 59 billion messages were typed in mobile phone keyboards in Germany. Since then it goes downhill. In 2013, it was just under 38 billion and in 2014 only 22.5 billion. According to a study by consulting firm Dialog Consult, the number of text messages sent in 2015 will be only one quarter of 2012 compared to 2012.

A lot of competition for the SMS Services in India

The Germans send almost 700 million WhatsApp messages every day. The SMS (Short Message¬†Service) is also fighting against mobile competition on other channels. The world’s largest online network Facebook has another SMS replacement in the race with Facebook Messenger. With many different functions, the messenger wants to be something like “the Swiss army knife” among the text messaging services – from payment to taxi order. Earlier this year, the service cracked the mark of 800 million users worldwide.

In 2012, Threema was launched in Switzerland. The service advertises especially with its encryption, with which no one except the interlocutors can have access to content. In particular, after Edward Snowden’s revelations on Internet surveillance by intelligence agencies, Threema and similar offerings promoting strong encryption were heavily received. Other Western messengers have since been expanding crypto protection.

In China, where Western online services are largely blocked, domestic SMS services alternatives have spread. The service WeChat of the online group Tencent came last to 650 million users – a jump of 39 per cent within one year.

“Anyone who writes a message today or sends a picture from a mobile phone uses Internet-based services in many cases,” says Bernhard Rohleder, managing director of Bitkom, the digital association of Germany. This will become even stronger as mobile broadband networks become faster and more and more smartphone users are using mobile data flatrates. But: “The messenger services will not completely replace SMS in the medium term,” says Rohleder.

Companies and older users are still loyal to SMS

Especially young people use social media, like Facebook or WhatsApp

It is above all the older mobile phone owners who are still sending text messages, and those who have become accustomed to texting, says Daniel Berger, editor of the computer magazine c’t in an interview with DW. “I think they will continue to do that because they do not want to or can not get used to it,” says Berger.

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In addition, many companies use SMS. Airlines will use this route to send boarding passes for check-in at the airport, Deutsche Bahn will provide information on train delays, banks will send mobile TANs for online banking and parcel services will inform their customers about delivery dates.

SMS does not pay anymore

Nevertheless, the mobile phone companies are not doing much texting anymore. Although an SMS costs up to nine cents, but since many mobile phone users have flat rates, they often pay nothing extra for a text message. And the messages that companies send to their customers are usually channeled through wholesale discounts.

For the mobile service providers this means that the billions in sales through SMS are over. As recently as 2009, SMS revenue in Germany contributed eleven percent to total vendors’ revenues; In 2014 it was only around five percent, according to a study by Dialog Consult.

WhatsApp will also bring new golden times to mobile operators. Because usually the mobile phone users do not exceed the already booked data volume of their mobile phone contract for it.

WhatsApp also for companies?

And the competition continues to pull the SMS to the bone. In January, WhatsApp co-founder Jan Koum not only declared that WhatsApp will be free in the future. He also plans to push into the field of communication between companies and consumers – in the area in which text messages are still sent. “Reflecting on SMS was about two things: communicating between people and between businesses and people, we did the first part, but we think the second part can be big too,” Koum says an interview with the German Press Agency.

Berger from it also sees potential: “I believe that WhatsApp and the Facebook Messenger are increasingly becoming platforms on which you can also use services – for example, to reserve a table in the restaurant,” says Berger. In addition, WhatsApp would work to encrypt its data. Greater security could strengthen the push for communication between companies and customers.

In India, there is already a company where WhatsApp sandwich orders are accepted, said Jan Koum at a conference in January in Munich. Another small company would sell chocolate through its platform. Only exceptions or the beginning of the big entry into big business with companies? At least WhatsApp hopes to attract larger corporations as users and is working to develop tools and offerings that enable airlines and banks, for example, to efficiently and securely connect with their customers.

The advantage of the SMS remains that it works on any mobile phone – without WLAN, without LTE, without Internet access and without the recipient having to have the same service installed. He only needs a telephone connection. However, this advantage will sooner or later disappear as more and more regions are connected to the mobile Internet. There are enough plans.

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