Tuesday, August 26, 2008

Could Obama's VP pick have triggered millions in SMS traffic?

If you do the math, using the best estimates available to you about text messaging (SMS) usage in the US, the results could be staggering: A single news announcement may mean a small windfall for telcos.

If Sprint's early estimates are accurate and if they're reflective of other carriers' traffic on the day Sen. Barack Obama announced his running mate, the resulting flow of text message traffic on the nation's networks could theoretically have generated more than $118 million in extra revenue for the nation's cell phone carriers.

Here's how the theory works: Analytics service Nielsen Mobile announced yesterday afternoon that, based on the billing activity of sampled customers, it believes some 2.9 million people were recipients of the 3am text message from the Obama campaign, announcing Sen. Joe Biden as his running mate.

That's actually not a lot of people. As the telecommunications industry trade group CTIA estimates, based on December 2007 sampling, some 48.1 billion text messages are sent by Americans every month. For the average day, that's about 1.58 billion SMS messages; so the Obama blast by itself would have only represented two tenths of one percent of the entire day's SMS traffic on US networks, for August 23.

That's not the bump Sprint reported, however. It says its SMS traffic levels ballooned to 250% of normal, which would have accounted not just for the initial blast, but for all the response from people who may not have been aware their phone also had a "talk" feature.

If you apply that 250% boost figure to the CTIA estimates (again, assuming Verizon Wireless, AT&T, and others received similar traffic boosts), that means some 3.95 billion text messages may have been processed that day, for about 2.37 billion extra messages on that subject alone.

With estimates of the average price per US-based SMS message at $0.05, that means $118.6 million in extra traffic may have been generated, perhaps in just a few hours' time. All this for discussion of a candidate who, after all was said and done after the final round of the Iowa Caucuses in January, could only muster less than one percent of caucus voters.

Could Obama's VP pick have triggered millions in SMS traffic?

2:45 pm EDT August 26, 2008 - Nielsen Mobile Director of Insights Nicholas Covey told BetaNews this afternoon that he believes the 250% traffic boost figure may, in the end, only apply to the segment of the SMS network where Sen. Obama's "short code" messages were being trafficked.

"This makes a substantial difference in terms of the total carrier revenue that could potentially be attributed to this text message campaign," Covey wrote us.

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