Another free SMS service bites the dust

SMSboy, the free online text messaging service, has been forced to shut down following the move by mobile operators to charge for cross-network messages.

The service, which launched in November last year, enabled users to send from a PC free text messages to mobile phones in the UK and Europe.

But as reported by vnunet.com in January, the UK mobile operators are to charge each other a fee for every text message sent to a rival network. The interconnection charge will be set at 3p for each cross-network text message.

Although mobile operators insisted the move will not lead to a rise in the cost of sending a text message for their users, the interconnection charge is expected to double the amount the free message providers will need to pay to send SMS traffic.

Shakil Khan, founder of SMSboy, told vnunet only last month that the company was concerned over its future and warned that the interconnection charges would put "a lot of people out of the market".

SMSboy said it attracted over one million users to its site in the eleven weeks it offered the free service, with over three million messages sent. The company has slammed the operators' decision and has accused the major telecoms companies of killing innovative new services and squeezing out competition.

"The cross-network charges mean nothing to the operators themselves, because in practice they cancel each other out," said Khan. "We had 20 per cent of the free messaging marketshare but there is no way we can carry on and compete with the charges."

"Luckily we haven't got any major redundancies, but it is such a shame we have been squeezed out of the market this way," he added.

Last week ISP Totalise suspended its free online text messaging service, citing the operators' decision to introduce reciprocal charges. The company said it needed to work out how much it will cost to continue to offer the service to its users.

Internet portal Lycos.co.uk also warned last month that it may be forced to withdraw its free text messaging service.