.

SmartMoney Blogs

Pay Dirt
A daily look at what we buy, how we spend, and the companies that do right - and wrong - by their customers.

Text Message Prices Could Drop; Teens’ Parents Rejoice

The TXT IM (text instant message) is replacing the TXT MSG (text message), which could spell savings for parents of texting teens and other heavy users but eventually lead to extra charges on your data plan.

iStockphoto

An article in the Wall Street Journal reports that carriers are facing a growing threat from free instant messaging programs like BlackBerry Messenger, Yahoo! Messenger and Facebook that send messages over the Internet rather than through the carrier. Earlier this week, Apple announced it was creating a free instant messaging platform, too.

Users are still texting away — they sent more than 1 trillion in the second half of 2010, according to CTIA, a wireless industry trade group — but the 8.7% increase over the previous six months was the smallest gain since texting first took off. Analysts say they expect texting to continue to drop off as smartphone sales grow and more users turn to these apps as a way to slim the voice and text portions of their cellphone bills.

Right now, consumers can take advantage of those free messaging apps and others that cut calling costs to save, by our estimates, as much as $500 a year. The average American teen sends a whopping 3,339 texts per month; by switching to a free app like Yahoo! Messenger or even Facebook, the family could save as much as $240 per year. That’s as much as $240 per year. Even the occasional texter on a $5-per-month plan would save $60. (The catch: to really save, everyone you would be texting needs access to the same program.)

Text message plan costs are likely to drop in coming months, and could eventually be wrapped into voice plans as a free extra, says Todd Day, an industry analyst for Frost & Sullivan. But the savings from switching to a free instant messaging app are likely to be short-lived. Carriers are moving away from unlimited data plans. Although instant messages use very little data, someone also using his phone to stream video or music could see his data bills increase. Carriers are also working to implement software that tracks down your data use by individual app, Day says. Consumers are likely to start seeing differentiated data plan add-ons — broad ones like a few bucks extra for a streaming video or instant messaging package, or a more specific $X for unlimited Facebook or YourTube traffic.

PayDirt readers, what do you think about the prospect of being charged not just how much data you use, but what apps you use it for?

Comments

We welcome thoughtful comments from readers. Please comply with our guidelines. Our blogs do not require the use of your real name.

Comments (0)

    • Be the first to leave a comment on this blog.

About Pay Dirt

  • Pay Dirt examines the millions of consumer decisions Americans make every day: What to buy, how much to pay, whether to rave or complain. Lead written by Quentin Fottrell, the blog examines these interactions, providing readers with news, insight and tips on shopping, spending, customer service, and companies that do right – and wrong – by their customers. Send items, questions and comments to quentin.fottrell@dowjones.com or tweet @SMPayDirt.

.