Indian free texting service proves successful

14 January 2010

NEW DELHI: SMS GupShup, a free text message service, has attained widespread popularity in India as an alternative to Facebook and Twitter.

Around 7.4bn messages, around 5% of India's entire text message market, are sent through the service each year.

SMS GupShup retains around 26 million domestic users, including many rural and low-income customers who do not have an internet connection.

Webaroo Technology India launched the service in 2007, and is now generating $225,000 (€156,000, £139,000) in revenues each month, the bulk of which comes from the sale of display ads which appear alongside users' messages.

Research from Visi Sense has suggested that Twitter and Facebook have just 1.3 million and 9.5 million Indian users respectively, out of a total population of around 1 billion. 

This reflects India's limited network infrastructure, which has impacted on the growth of both home internet and web-enabled smartphones.

SMS GupShup, meaning "chit-chat" in Hindi, is structured around groups, which are themed by interest and cover subjects from finances to the arts.
Users discuss the subject in question in a similar way to online social media groups.

Although SMS GupShup has raised around $25m in investment, and has plans to expand into other markets in Asia and Latin America, rising message purchase costs in India could stymie future growth.

The firm buys space from Indian wireless operators, spending around $0.20 (€0.14, £0.12) per 200 messages.

These costs have risen by as much as 30% over recent months.

Users are currently restricted to sending four to eight free messages per day, depending on the size of their group, but tougher usage rules might be needed in future to keep costs down.

Gaurav Mishra, ceo of media consultants 2020 Social, commented: "If 1,000 people in a group can keep sending messages to everyone else, that cost quickly becomes unmanageable."

Meanwhile, Twitter has adapted to the Indian market by signing a deal with Bharti Airtel, an Indian wireless firm, to offer the service via text message.

Facebook has also agreed a partnership deal with SMS GupShup itself, paying the Indian firm to send texts detailing users' status updates.

Data sourced from Wall Street Journal; additional content by Warc staff