Twitter’s gradual roll-out of non-US mobile network operator “deals” continues with their blog announcement that Vodafone New Zealand has gone live with a short-code SMS service; Australia is allegedly joining soon. This comes on the tail of Vodafone in the UK, and all the Canadian operators joining US operators in enabling Twitter users to send and receive tweets via text messages.

Everyone Tweets. Nobody makes money.

For a company that has no visible, or public revenue model (nor any driving need to soon create one, apparently), Twitter’s engagement with operators to provide access the service across their messaging networks is perplexing. Mobile operators worldwide make a lot, and I mean a lot, of their revenues (and even more of their profit margins) out of text messaging. In most mobile markets, rampant competition and subscriber churn rates lead operators to offer value “bundles” (or packs, caps, whatever) of usage (minutes, texts, megabytes or dollar values). Twitter’s existing operator deals provide for regularly-charged mobile-originating (MO) message, and free (to the subscriber) updates, or mobile-terminating (MT) messages.

Now this isn’t a bad deal per se – the operator gets some network usage in terms of SMS (so no cannibalization of existing revenues) and to be fair, “on-net” (i.e. on a single network, not between subscribers on different networks) SMS traffic is about the cheapest cost an operator has (in real terms it’s fractions of a cent per message, which explains why SMS can be a very, very profitable exercise for the operator). But to be clear, it’s Twitter that gets the subscriber engagement, not the MNO – the operator’s value-add is primarily to do something that (eventually) all of its competitors will do as well.

Other channels for mobile Twitter usage are similarly anonymous and commoditized. Mobile sites like m.twitter.com (and m.tweete.net) are some of the more currently trafficked destinations through WAP gateways, while smartphone clients (I use TwitterBerry, for example) similarly use mobile data, but in small amounts at an increasingly lower cost.

As the mobile consumer price per MB heads towards zero (and with the likes of O2 introducing all-you-can-eat data plans, one could argue that it’s already there), operators are effectively giving away one of the few network assets they can use to engage (and monetise) subscribers; in this case it’s their SMS messaging gateway, which is an “enabler” (other common mobile enablers include mobile location centres, MMS gateways, billing/charging platforms etc). Was the internal business case for Twitter just too hard for the MNO product managers to get their heads around?

Perhaps it was just a case of internal project costs being considered too high to open up the network. Or to bill subscribers in some way. Industry groups like the GSMA (with the OneAPI initiative) are working to bring readily-adoptable standard interfaces to web developers to use and create value with mobile enablers (and I should know, because we’re working on this initiative and will soon launch a pilot service based on our OneAPI implementation). Already, many mobile networks have third-party APIs and interfaces that would have allowed some form of value to be added to a Twitter service.

Or maybe, just maybe, the operators didn’t see Twitter over SMS as an innovation opportunity.

Either way, it is well-documented that the major social networks are suffering from the lack of scalable business models. Mobile operator engagement represents a massive revenue opportunity to engage and add value to mobile use of social networks. And it just seems odd that neither the likes of Vodafone, the North American mobile operators, or Twitter themselves (Kevin Thau, are you reading this?) saw the opportunity worth pursuing.