Text messaging on the decline due to social networking, iMessage

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Is text messaging on the decline? It is if you believe Citigroup's analysts. The company noted a drop in SMS^(INFO) use for Christmas and New Year's Eve in Europe, which it says signifies a shift to other forms of messaging, such as social networking websites and Apple's iMessage.

Citigroup said that the biggest drops were seen in the most mature text messaging markets, such as Nokia's home market of Finland. There text messaging on Christmas dropped 22 percent versus last year. The data comes from TeliaSonera, the country's largest wireless carrier.

The Financial Times quotes Citigroup analyst Simon Weeden as saying "The true impact of changes in behaviour around Facebook, Twitter and Apple's latest move to provide automatic text rerouting through iMessenger have not yet been felt." Citi says that many European carriers are at risk of seeing their lucrative text messaging businesses dry up, but that pre-paid focused markets such as Spain and Italy are at most risk.

As a result of the changing market, Citigroup expects many European carriers to start offering text messaging bundles or to lump text messaging into normal voice contracts. This transformation took place in the U.S. a couple of years back, and is being fueled by the taste for "unlimited" everything that U.S. wireless consumers have acquired.