Twitter cuts UK SMS – there goes another business model

Twitter has killed its outbound SMS services outside of the United States, Canada or India, and with it a potentially highly lucrative business model in Europe. In the UK you’ll still be able to send Twitter an SMS to update your status, but you won’t be receiving them. Apparently rising rising costs made it impractical, and we have been getting those SMSs for free.

In a blog post co-founder Biz Stone says: “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.” In the US and some other countries they’ve been able to negotiate service fees with mobile operators that cut out after a certain point, saving them money. But they haven’t got this deal in the UK.

However, as a few mobile experts are starting to point out, Twitter could have charged heavy users a premium bundling package to recieve their Twitters via SMS. Alfie Dennen, co-founder of today says that he would have paid “4p per message if offered a 250 sms bundle.” Vero Pepperrell of mobile startup Taptu finds it “Really annoying that DMs won’t arrive by SMS anymore.” Many UK Twitterers today are expressing their disappointment using phrases like “shame”, “bye bye Twitter”, “disappointed”, “Gits” and “Gutted”. Setting up premiums SMS services is a doddle.

In Europe there is mainstream adoption of premium SMS services so introducing charges would not have deterred too many Twitter users. Personally I was amazed Twitter didn’t do this from the outset two years ago. In many respects, Twitter took off in the UK precisely because it had an SMS service, whereas Jaiku, the competing service which was bought and virtually killed off by Google (at least so far), did not only had SMS in Finland, a tiny market, and thus languished on the desktop rather than the mobile. If Twitter had put even a small premium on SMS it might not be cutting the SMS service today – and it would have a sustainable business model. It may come as a surprise to non-Silicon Valley American’s but not everyone in Europe has an iPhone or is on unlimited data plans. SMS still rules in Europe and makes any update services far more available to the mainstream.

It’s worth noting that because the UK SMS service has gone, people in other European countries using the UK number for mobile updates have now been cut as well.

UPDATE: There is now a Facebook campaign to get UK mobile phone operators to “cut Twitter a decent deal”.