Diwali, the festival of season is celebrated widely in India and a common way to greet one’s friends and family these days is through text messages. But for subscribers who have been trying to send text messages, the experience has been bad.
The intensity of SMS usage is so high that Aircel subscribers (in Bangalore) are unable to send messages. And the company is even playing automated message when you call the customer care informing that subscribers will face issues with sending SMS (and this happened on Sunday, 2 days before Diwali). Airtel and Reliance aren’t doing any better either.
Will things improve over the next 2 days? No. 
Telco War
There is a full blown telco war on. Airtel has closed its network to incoming text messages from subscribers of Aircel and Reliance. Rival operators have been flooding Airtel’s networks with spammy text messages, says an Airtel spokesperson cited in a report.
For web based free sms providers, and data based apps, this is a huge opportunity. Free messaging apps like Whatsapp are already giving telcos a run for the money. According to an industry report, Global telecom operators lost $23 billion in SMS revenues by the end of 2012 as users shifted to free messaging apps. The report by Ovum said that the losses would go up to $54 billion by 2016.
Companies like Way2sms and 160by2 usually see a large number of users logging in to their web services to send free messages during the festive season when operators charge a premium on text messages.
Should operators be charging for text messages at all?
Not really. Text messages usually cost next to nothing to operators. In fact, all of it is pure profit for operators as of sending a text message is almost nil to operators. Unlike voice calls or multimedia messages which are sent through the data link, text messages are sent using a signal link for which operators pay a flat rate anyways.
While there are termination charges and the like, some countries have done away with the concept totally.
Also with the advent of free messengers and especially ones tapping niches like Whatsapp or language based messengers like Plustxt, SMS by itself would be a costly proposition. Now with the price increases and data becoming cheaper, we think there would be an inflexion point where incremental cost of sending SMS would soon overtake the fixed cost of an alternate data based messaging app.
Having said that, SMS still remains the most assured form of delivery in a country where majority of phones are non smart and dont have data connection. It also has been a driver of non voice revenues (remember voice revenues are among the lowest in India). With such steps, the telcos might have shot themselves in their respective feet – also dealing a fatal blow to companies like SMSGupshup, ACL wireless, Valuefirst etc whose primary revenues are from SMS reselling.
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