Twitter says they’ve stopped sending SMS updates to Twitter users in the UK because of the high cost of sending those messages. US, Canada and Indian users can still opt to receive messages via SMS.
Twitter says that a single user, capped at 250 received SMS messages per week still costs them $1,000 per year in SMS fees. They don’t have that problem in the US and some other countries because they’ve been able to negotiate service fees that max out after a certain point.
“We’ve arrived at a point where the responsible thing to do is slow our costs and take a different approach” they said in the blog post.
Next up: a revenue model.
UPDATE: See TechCrunch UK for more UK reactions to this move - it’s not pretty…
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Twitter - SMS = DEAD
Wonder how much it costs them per SMS in each of these countries.
Anyone know?
Well in the UK, the SMS rate for standard pay-as-you-go users is around 10-15p (20-30 US cents), this is obviously cut by buying in bulk, but they are also sending from the US which bumps it up a lot.
We pay around 10c US for wholesale SMS to the UK. The UK is one of the most expensive places to send SMS to as the operators charge interchange fees.
Wow… first the follow limit now this. Twitter is downsizing everything they can.
Freetards please enter complaints below
There’s the revenue model right there. Bulk purchase outbound SMS (Twitter->SMS) credits through an SMS gateway (or acquire an SMS gateway company), then resell those credits to UK users who want the convenience offered by SMS at a slight markup - like 1 pence per SMS.
Offer the same credit scheme for inbound SMS (SMS->Twitter) to offset the costs of having a Twitter mobile number.
That could probably be more easily accomplished using Premium SMS, where Twitter billed users at 1 pence per message or such.
Well I guess it was fairly predicatable that the free sms model was unsustainable in the long-run (even with Twitter’s millions in the bank), at least in those regions where terms couldn’t be reached with the operators and when operators don’t have a history of creativity and innovation. Passing on the costs for onward sending of messages to followers never looked likely, even with the cost of sms messages being lower than ever.
But there’s something that’s not quite right about this situation. Firstly it looks like an own-goal by the mobile operators in the effected regions as it potentially takes sms out of the equation totally for these type of potentially sms-heavy communication services, replacing with mobile apps and email-based services, e.g. twittermail. sms is still an incredibly convenient and easy-to-use format, and a lucrative one for operators as far as I’m aware - driving users away from it to other formats doesn’t make a great deal of sense to me; not great for user-experience (not that’s a big consideration for the operators, who really still only seem to understand connectivity and not content/services/user behaviour) and not good for the operator’s revenues (although maybe they see data/email monetisation as being the way to go).
And operators obviously aren’t known for their creativity or for their understanding of consumer mobile services, but there seems as though there’s one approach that could have been pursued here which could have turned a significant cost into a significant revenue stream:
ad-supported sms
I don’t know if the economics stack up, in terms of being able to achieve the necessary cpm/cpc click-through to cover sending costs and generate a return (bet they do though), but seems to me that if they can be made to add up then you’d get plenty of users opting to continue to receive messages from twitter via sms. And if the ad-targeting were good based on the users profile then there could be some good click-through (particularly in relation to location-based ads and info). Maybe it’s an opportunity for a 3rd party twitter app provider to step in and to monetise tweets by ad-supported sms, which obviously wouldn’t be great for twitter. Maybe Google?
Does feel as though this could be part of a negotiating ploy by twitter, possibly in the face of rejection of terms by the operators. So maybe there’s some innovative stuff in the pipeline. But if not then it’s another indication of the failure of operators to approach an emerging opportunity with a creative tack. Not that that would be a great surprise.
Just received this - looks like a good idea to express our dissatisfaction
Twitter Strike! No Tweets on 18 Aug to support cut off SMS users http://tinyurl.com/6y6a69 Please re-tweet this message to your followers.
idiot.
they should just charge users for it.
oh wait, that might accidentally lead to a business model. nevermind.
So true… They seem to be focused on not losing money, rather than actually making it!
Or just offer a premium, ad-free, version: a twitter sms package. Surely the operators should at least take a look at that. Although it’s probably too small an opportunity at the moment to be on their radar. And probably couldn’t be made to stack-up in a cost-effective way for really heavy users (based on Twitter’s stated numbers).
I wouldn’t be surprised if Google were to drop SMS from Google Calendar in the UK. It’s a useful service for people always on the move, but I’ve no doubt people set auto SMS reminders for all calendar events when they don’t really need them.
It must cost Google a small fortune. Sure, they can afford it, but I’d rather they spent the money on something more useful like improving Google Checkout.
I remember that vid Scobes did, the one, where he interviewed the Twits about the outages! Anyway, one comment that stuck out to me was, “money isn’t the issue, plenty of that in the bank.”
Obviously that is not the case… You take in 20mil and deliver no revenue, something gotta give
Twitter is not going to last long in the current mobile environment.
Yeah, they dropped the UK number so they dropped users using that number in France, Belgium, Luxembourg, Spain, … Virtually, every country in Europe. It’s not just UK.
UK users are up in arms. Here come the Facebook campaign…
http://uk.techcrunch.com/2008/.....ess-model/
in europe no one except maybe in the UK uses twitter with SMS simply because sending a twit via a UK SMS number is damn expensive. Most users prefer given wifi/3G penetration use their data plan. So i don t think this is a big problem.
the only thing missing would be the direct message alert on SMS, but this can be solved with email.
in addition they come soon with local numbers which will be better for those who really want SMS
Ouriel, you’re right that posting tweets is too expensive via SMS in the UK. However, I think you underestimate how important SMS alerts are for some of us.
Furthermore, as many Australians (and others) have pointed out, Europe is not the only place that is affected by this.
Well Ouriel, speak for yourself. I’m not in the UK and I’ve got a quasi-free SMS plan to numbers worldwide. I’ve been using SMS to send messages to Twitter for ages now. 3G/wifi usage, or actually devices that support it, is nowhere near SMS usage. At least in the Europe I live in.
Concerning the cut-off: I am a bit miffed, but on the other hand, SMS sending was so flaky anyway, in the end it’s more a question of principle than of real value.
How bizarre. Instead of turning this into a revenue opportunity by charging a small fee per sms, they just shut down the service.
It’s almost as if they’re deliberately trying to avoid potential revenue streams.
Don’t know about you, but I’m from Israel and surprisingly didn’t get to my phone any of the direct messages people sent me today, nor updates from the people I follow.
I hope it’s not the end of SMS for us too.
How ironic…we just added UK SMS support today to Brightkite
heh!
@Jeff i agree on alerts, can be partly solved with email alerts. but will miss that too. should be solved with local numbers
@Richard: yes if you have unlimited, there is no question. but how many do?
in the meantime there is a poll taking place here for non USA and non UK residents
http://www.polldaddy.com/poll.aspx?p=854817
@ouriel How about the data plan when travelling abroad ? even checking your mails gets expensive… And what is cut is not updating your twitter status, but receiving them…
My phone basically only has SMS and not wap, and I don’t count how many times I virtually querying Google via twitter («what’s the currency ratem here in Croatia», and getting the answer a few minutes later).
For the local numbers, I have a bad feeling about this, for French carriers…
Mass UK (at least for now) migration to http://jaiku.com/ looks like Google will win big from this one?
Unles Twitter inserts a subscription based service, but they better be quick!
It was probably about time to cut down expenses and introduce a revenue model, nothing alarming or outrageous about that in my opinion. Finding a revenue model could be a tough nut to crack though, as most advertising products that would suit Twitter would be rather costly to implement and run…
paying for sms wont be good choice, until tweeting with “importance rating” option becomes available. Send me sms “if this many people send ‘high importance’ tweets”. Anybody who tweets a message should have option to rate importance, again it so happens that some things will be important for some people and not for rest. sadlfjka ofjwaofj aaargh..
haha. what a dumb business. oh wait. a business is for-profit, which twitter will never be.
Connecting twitter with sms on mobile phones would have made it a killer in Europe. SMS pricing models by the big operators have always stood against this model and unless they do not drop this strategy we will have to wait for sms to be replaced by instant messaging services and alike no smarter phones.
Note: I do not consider myself a heavy sms user. I have a cheap voice flatrate contract with a provider in Germany. Almost 1/3 (!) of my bill is made up of sms charges. The providers are goign to hang on to this cash cow as long as possible.
What? You mean “stop bleeding money” isn’t a business model?
@Alexandre i am not so worried as you. the SMS is not they to twitter. it never was and is likely to never be. we ll have a feature less and compensate otherwise in the meantime. most users will survive that…
A shame, especially those in mainland Europe, where the SMS feature of Twitter was a big big deal.
I’m looking forward to what their premium package will be (please include SMS on D and @) and what they come up with for their official iPhone app
This strikes me as an unfortunate decision on Twitter’s part. It’s obvious that footing the bill on their own wasn’t a viable long term solution, but direct messages are an integral part of the Twitter experience for most UK users I know. Further removing features brings Twitter closer to the cliff edge every time.
It has the upper hand on other networks by having the critical mass services like Jaiku don’t have, but there’s nothing worse than giving users features then taking them away, it’ll only create ill will in the community.
I’m hoping this is temporary and that UK operators and Twitter can get their heads together to continue providing the service, albeit at a cost to users.
Twitter, we like you, but wake up, you’re not alone in your sphere and people jump ship mighty quickly when they’re not satisfied…
By UK users you mean users all over the world who use the UK number for SMS tweets, right?
Bizarre that they ever stumped up the cash to do this in the first place.
Does Twitter actually have any plans to introduce a business model?
It could be that the carriers are looking at Twitter and thinking “hell we could build that!” Given the simplicity Twitter’s appearance, its not that far fetched.
I’ve never understood direct messaging Twitter…why not send them an email/im/sms directly?
MUST READ:
What Twitter’s Global Failure Means for Africa
http://whiteafrican.com/2008/0.....or-africa/
Specifically UK follows rather bad model whereby mobile handsets are “cheap” because of subsidies however users get totally ripped off on SMS/phone calls to make up for “free handsets” that they get.
As the result SMS are just way too expensive - as people get more programmable phones that are connected to always on wireless broadband then these notifications can be done free of charge - SMS revenue model for mobile phone service providers will collapse very soon, probably alongside with expensive talk plans thanks to VoIP.
Thats a tough call, Bandwidth on phones in Europe costs the user and so does SMS. Its tough for a company to cut services and may have been better to think of a charged model.
I did use Twitter SMS in India but I largely prefer Twibble or even the Twitter mobile site just because I think it is wrong for Telecom companies to charge people with bandwidth plan for each SMS.
I find some of Twitter’s decisions funny but I am glad I am not a Twitter SMS user in the UK.
When you give away “Free” phones, you got to make money somewhere else- usually on subscriber plans. In many countries, most carriers expect you to have a phone already- they just sell you the plans. It gets cheaper for ’smart’ consumers because whoever uses whatever services, they pay for it- use more SMS and you pay for it- but only for that part.
It is ironic that the more “free-market” regions are more restrictive. Contracts and subscripton plans and all that. They just average- more of a centralized planning mode.
In the end, customers pay what makes the carrier profitable- else they would shut down. I guess it is just a tradeoff. There is no free lunch, and folks really need to understand that. It is better to keep the government/subsidies/market controls at an arms length- and so also the concept of averaging. But then innovation will be a step behind the others because you don’t have a captive audience (with the yearly contracts).
Wait, Twitter had to negotiate service fees for SMS in the US? I always thought sending SMS is free though email gateways like phonenumber@tmomail.net?
I use TinyTwitter (www.tinytwitter.com) on my data plan and don’t see what the problem is… it can poll every 4 mins (or on demand if I’m that obsessed) and supports cool things like goelocation (if you have built-in or bluetooth GPS) and photo upload all within the client.
no beeping from incoming SMSes every 30 seconds - bliss!
I never thought I’d see the day that Twitter attempted to control expenses! I started wondering about this a full year ago; had since concluded it would never happen.
A business model would be great, but do you actually expect this business model to produce more than $1,000 per user per year? Either way, they needed to can this.
This was always going to happen - it was obvious that twitter could not sustain giving out free SMS text messages to UK customers forever.
Still, their loss is someone else’s gain - people should check out other online SMS services like http://www.txtlocal.com and http://www.mblox.com - noth of which are paid services - but very low cost and a fine alternative to twitter.
this is going to be the case in all European countries.
I wonder if this is the beginning of the end of the 140 chars limit on Twitter, since such limit is imposed by SMS.
Um, everyone who says they would gladly pay Twitter to send SMS messages realizes that $1000 divided by 250 messages is $4 a message right?
Charging a couple cents, even 25-50 cents a message on something that costs ~16 times that is not a business model, so think again before you rant about Twitter closing the door on a potential revenue model…
Jaymon - read more carefully.
250 messages a week is 13,000 messages a year.
It’s like $0.077/message. Still outrageous. Still not a business. But nowhere near $4/message.
Zoe, you’re right, my bad…
@Zoe: Yes, $0.077 per SMS is too high, considering that they should be getting bulk pricing. If you do a Google search for India SMS, you see ads for $.004/SMS for bulk rates. AT those rates, it must be around $50 per user per year for 13k SMS.
I don’t know where they get the $1000 per user per year breakdown- but I guess they are referring to just the UK market. Are they are including overheads (staff, software etc)?
There is a French group for a decent deal between Twitter and the mobile operator : http://www.new.facebook.com/ho.....7144630800
I would be interested to know what percentage of UK SMS gateway users actually used their weekly limit of 250 messages. I never had any tweets other than Direct Messages pushed to my phone, which amounted to no more than a dozen SMS messages per week. And most of those were used in connection with third-party apps like Gcal and Toodledo. Both are significantly less useful to me now. I’m sure I’m not alone in thinking that “power users” and bored teenagers were the ones racking up the huge bills for Twitter…eventually ruining a great tool for everybody else.
Hi,
I thought you might be interested to know that myself (@PaulKinlan) and (@prawlings) have launched a twitter service called Twe2 (http://www.twe2.com) that gives Twitter users their DM’s, @replies and custom searches via SMS for free. The free part is that the messages are advertising subsidised.
Kind Regards,
Paul Kinlan