Free texting could kill SMS business

A survey of 1143 Australian smart phone users found 44 per cent had a free instant messaging application on their devices, Telsyte telecommunications analyst Foad Fadaghi says. So far, unlimited text messaging plans have blunted displacement of SMS by over the top messaging alternatives.

Some "53 per cent of mobile instant message users in our survey indicated they have not changed the amount of SMS messages they send and receive due to mobile IM," he said.

Fadaghi said that using services like Skype to replace phone calls had been limited due to 3G network reliability issues, but many were using it to save costs on overseas calls.

In the United States, more than two trillion text messages are sent each year, generating more than $20 billion in revenue for the industry. SMS revenues account for about a third of Verizon's operating income, in fact.

Free texting could spell doom for SMS