Data, SMS and Messaging Apps
In the last few years, the contest between data rates and SMS (text messaging) has intensified. This has been due in no small part to the rise of messaging apps such as WhatsApp, Viber, Kik and WeChat. However, whether data or native SMS is cheaper is not always clear. Moreover, the real pros and cons of SMS vs. messaging apps are often debated.
Data Plans: Costs and Limitations
One argument for why instant messaging apps like iMessage and Google Hangouts have grown in popularity is that data is cheaper than SMS. That is certainly true in some countries, particularly in the emerging world. For example, in the Philippines, Russia, parts of China, and Uganda, SMS is substantially more expensive than data. A prospective Russian advertiser told us that data is ridiculously cheap for him, but sending a text message, even locally, costs more. The same is also true in Mexico, where over 90% of all texts flow through WhatsApp as opposed to SMS.
Although data is cheaper in some regions, it is not without its own unique limitations with respect to messaging apps. For example, most messaging apps rely on data (or wifi) to function. If you drop your data signal, run out of data, or have no wifi signal, you cannot use many of these apps. This may not seem like much of a problem in the US or western Europe, where data and wifi seem ubiquitous, but there are still many regions in the world where data and wifi towers are scarce.
On the other hand, SMS will still work even without a data signal or wifi.
Another limitation of messaging apps is that they require a smartphone. You cannot download WhatsApp on a feature or flip phone. However, these low-tech phones all come outfitted with a native SMS app. It's already built in; there's nothing to download. Again, this may seem trivial in a place where everyone has a smartphone. However, there are still regions in the world where smartphones are too expensive.
Places Where SMS is Cheaper than Data
Although there are some countries where data is less expensive than SMS, there are other regions where it is just the opposite. In the U.S. and Canada, SMS is far more affordable than standard data rates. Additionally, SMS is still cheaper in many regions in the emerging world, including Pakistan and some regions in India, China and Brazil. A Nielsen study recently found that 50% of Indians with data plans actually scrapped them and disconnected from WiFi due to exorbitant costs.
But like SMS, messaging apps also have their advantages. They offer a more secure medium to communicate with friends because they don't require you to reveal your phone number. Moreover, messaging apps are less susceptible to abuse and spam than SMS.
So Which Is Better: SMS or Messaging Apps?
Neither is necessarily better or worse than the other. Both SMS and messaging apps have their strengths and weaknesses.
Perhaps you didn't know it, but SMS can do important things that messaging apps simply cannot do. With text messaging, users can actually access information from the Web -- and SMS can do this even without a wifi or data signal. There are currently no messaging apps that even come close to being able to do this.
As a result, many of our customers are actually smartphone users who need to either save on data, have no data plan, or live in regions with spotty wifi (e.g., Republic Wireless, MetroPCS, PagePlus and Tracfone customers, and residents in the Appalachian regions of the US). For instance, a Republic Wireless subscriber said in a forum that Text Engine solved her data management issues. For these users, Text Engine offers them a way to save money without having to forfeit the Internet.
- Short Messaging Services Versus Instant Messaging Apps, Deloitte white paper
- Will SMS survive ...?, Quora thread