I got an email from Twitter this morning saying that outside of the US, Canada and India they are no longer going to provide free outbound SMS updates. The web announcement is here and predictably there is a bit of chat in the blogosphere here, here and here. Unsurprisingly the reason is the cost, which Twitter founder Biz Stone explains thus:
Mobile operators in most of the world charge users to send updates. When you send one message to Twitter and we send it to ten followers, you aren’t charged ten times—that’s because we’ve been footing the bill. When we launched our free SMS service to the world, we set the clock ticking. As the service grew in popularity, so too would the price.
and he estimates the cost thus:
Even with a limit of 250 messages received per week, it could cost Twitter about $1,000 per user, per year to send SMS outside of Canada, India, or the US.
Aside from wondering why the situation in North America is different from Europe (the carriers there are not generally known for being more forward thinking) the really interesting thing will be to see how this plays out as a case study of a service that starts mobile, achieves massive growth largely because it is on mobile (or at least that is my perception – interested if yours is different?) and then retreats to the web because of cost.
One thing playing in Twitter’s favour is that whilst I suspect that most people make heavy use of SMS updates when they start using the service many then migrate to the web when the volume of updates starts clogging up their SMS inbox. Certainly that is what happened to me, and a couple of friends have said the same thing. If this turns out to be the general experience then Twitter will have executed on a great ‘start with expensive mobile service and migrate people to a free web service’ strategy.
I’m still not sure how they are going to monetise though…
PS – Twitter have outlined a bunch of mobile app and mobile browser options that allow people to continue to get free updates on their phones, but my guess is that iPhone aside those won’t be compelling enough from a user point of view to drive much volume.