Free services on smartphones is driving down the cost of contact

Still paying for your mobile phone calls and texts? It won't be long before you're in the minority.

Technology commentators say apps that allow free calls and texts from their smartphones are becoming so popular that paid calls and texting will soon go the way of the fax machine.

Popular apps include Viber, Skype and WhatsApp. Even Facebook offers free messaging and numerous websites allow text messages to be sent free to mobile numbers around the world.

iPhones and iPads have a built-in feature, iMessage, that allows users to send free messages to others with Apple devices. It also offers free video calling via FaceTime.


Paul Brislen, chief executive of the Telecommunications Users Association of New Zealand, said the market for paid text messaging and mobile calls had peaked.

The Commerce Commission's annual telecommunications market monitoring report shows mobile voice call minutes declined to 4.35 billion in the 2011/12 year, down from 4.40 billion the previous year and 4.44 billion in 2009/10.

The number of text messages sent was still growing but the growth had slowed markedly.

More than a billion more messages changed hands between 2008/09 and 2009/10. By 2010/11 and 2011/12, the growth was only 300 million.

"The market for voice and text is as dead as a dodo," Brislen said. "It's a matter of letting it all play out. All you need now is to buy a data pack.

"Vodafone is already offering unlimited calls and texting if you buy a big data bundle. That's the writing on the wall."

Eventually, he said, Apple would likely offer VOIP calling as standard on iPhones. "Then it's all over."

Peter Griffin, of the Science and Media Centre, said Viber had huge growth, and people needed to realise that the apps would still use data and so weren't completely free.

But, he said, even heavy users would need only about 2GB a month. 2Degrees offers a 3GB data pack for $50 a month.

"For a lot of people, it will be working out much cheaper. The big challenge for phone companies is that it will have an impact on the number of calls and texts they are able to sell. But they will be selling more mobile data."

Joanna Mason has noticed her phone bill drop by about $200 a year since she started to rely more on Skype for calls.

"It's great for chatting with people overseas and costs nothing, so it's very useful," she said.

Vodafone consumer director Matt Williams said smartphones had changed the way New Zealanders communicate. Customers were still using about 630 million text messages a month and 420 million mobile minutes.

But, he said, the future was about data."We're seeing nearly 100 per cent year-on-year growth in data services, which includes using apps like FaceTime and Snapchat, particularly since the arrival of 4G in February."

At the three Taylor Swift concerts, fans used 7244MB of data.

2Degrees said it, too, had seen a rise in chat app use. "This also contributed to a massive lift in mobile data use that has tripled in volume on our network over the past 12 months."