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Text messaging appears to be success story, but no one’s talking

The text messaging industry in the United States is growing by leaps and bounds, and most agree it has the potential to be huge. The application is really the first major win for the nascent and struggling U.S. wireless data market for consumers, and many agree it could prod wireless users to think of their phone as more than just a portable dial tone.

Indeed, many in the industry hope text messaging will act as a kind of primer, a teaser that will push consumers to pay for 2.5- and third-generation wireless data services-thus validating carriers’ massive investments in the technology.

While the importance of text messaging in the United States is paramount, getting details from the carriers on the subject is virtually impossible.

Most of the nation’s largest carriers have been offering text messaging services for years, but only early this year did they take the all-important step of opening up their networks and agreeing to send messages to the customers of rival carriers. PrimeCo Personal Communications, Leap Wireless, AT&T Wireless Services Inc., Verizon Wireless, Cingular Wireless, VoiceStream Wireless and Sprint PCS (which offers WAP-based messaging) all have agreed to cross-network messaging contracts. Analysts point to these interconnect agreements as the key factor in the success of messaging in Europe and elsewhere.

And it seems to be working.

Verizon Wireless managed 2 million text messages per day on its network during the first quarter-messages generated before the carrier opened its network to cross-carrier messaging.

“Since then it’s gone up dramatically,” said Verizon spokeswoman Nancy Stark.

But Verizon, as well as the rest of the carriers, isn’t giving specifics. They all cite competitive advantage or company policy issues for their reluctance to provide definitive answers.

But by collecting hints from carriers, messaging infrastructure providers and research groups, a picture of the U.S. text messaging market can be pieced together.

According to AT&T Wireless, its messaging load has increased 300 percent since it opened its network to cross-carrier messaging. The carrier was the first in the United States to make the bold move. Even more revealing, 40 percent of AT&T Wireless’ text messaging traffic goes outside the carrier’s network-evidence of the demand for messaging interconnection.

For their part, neither Verizon nor Sprint would offer any specific numbers related to the interconnect agreements. However, interconnect infrastructure provider InphoMatch Inc. said its network handles 90 million messages per month, a number that includes all the cross-carrier messages to and from Leap, AT&T Wireless, Verizon and VoiceStream. And since the company just added PrimeCo to its lineup, the number likely will increase.

But to get more specifics, one needs to turn to an outside source. Research firm EMC World Cellular Database closely tracks the U.S. messaging market, and has made some educated guesses.

According to the firm, AT&T Wireless led the messaging industry with almost 300 million messages sent in the first quarter of this year. About 60 percent of the carrier’s customer base owns a phone with text messaging capability. Next up is Cingular, which managed 200 million messages in the first quarter. Cingular too has a customer base with about 60 percent text messaging capability. The firm said VoiceStream is likely next in line, benefiting from the fact that all of its customers own text messaging-capable phones.

EMC said the nation’s largest carrier, Verizon, is farther down the list, having only managed about 92 million messages in April, because a smaller percentage of its customer base has text messaging-capable phones.

A final figure that could offer even more hope for the messaging industry comes again from interconnect provider InphoMatch. The company estimates 1 billion total text messages are sent out every month in the United States. This isn’t bad, considering the GSM Association estimates between 25 to 30 billion text messages are sent worldwide. And, since most U.S. carriers charge about 10 cents per text message, this means the U.S. text messaging market generates about $10 million per month.

And everyone agrees it will only grow.

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