“This year, we will zing out 1.2 trillion [Short Message Service (SMS) texts], predicts market-intelligence firm IDC,” Eric Bender reports for TIME Magazine.
“The average U.S. mobile teen now sends or receives an average of 2,899 text messages per month, according to Nielsen Mobile,” Bender reports. “‘With teens, the act of picking up a phone and calling someone is dropping away,’ notes Christopher Collins, a senior analyst with Yankee Group.”
“What’s most amazing about the texting craze is just how inexpensive it is for mobile carriers to provide this wildly popular service,” Bender reports. “SMS messages are not only extremely short (maxing out at 160 characters), but they also cleverly exploit today’s digital phone networks, leveraging transmission channels between phone and cell tower that were originally designed to coordinate voice calls. ‘They cost the mobile carriers so little that you could argue that they’re free,’ says Collins.”
“Srinivasan Keshav, a professor at the University of Waterloo in Ontario and an expert on mobile computing, …found that a text message doesn’t cost providers more than 0.3 cent,” Bender reports. “You don’t have to be a Wall Street analyst to do the quick math: with a carrier cost of one-third of a penny, when a customer pays 15 cents to send a message, 98% of that 15 cents is pure profit.”
Full article here.
MacDailyNews Take: As we’ve said many times, most recently here, “Data is data and carriers charging separate and extra amounts for some data (SMS, for example) is absurd and a scam.”
Data is data, whether it be text for SMSs, voices for phone calls, or what we traditionally think of as data for email and the Internet. It would be refreshing for carriers to price it as such.
@Jay-Z: you make too much damn sense. That’s the problem. Hence, the telcos will not adopt it.
Just imagine the monstrous competitive advantage a carrier would enjoy by offering free text messaging.
Well that’s not exactly true. It cost money to collect the extra fees and deal with parents that want to know why their phone bill is so high.
Q–Why am I paying a toll for this road?
A–Because we have to pay the toll collector.
I’m just glad AT&T;has finally allowed the iPhone to enter the 21st century with MMS.
How embarrassing.
I do not believe the charges are going away any time soon. Text messages to the cellular service providers are like french fries to the fast food industry. The delicious extra that is so desirable as to be essential, yet almost entirely profit.
Anyone charging a markup of 98% can only be scammer
– unless the product is as rare as a Michelangelo…
People. Revolt!
DRMSSDB is the WINNER!!! Could not of said it any better than that, it’s the cold hard truth.
Some fast-food places put their soda machines out where we can serve ourselves, and have unlimited refills (at least while we are there chowing down on our double cheezy greezy burgers). That Coke they charge $1.89 for really only costs them a nickel, so they still make a profit even with the refills. Some people still order a large, even though they could just buy a small and get up one more time to refill it (extra profit for the burger place).
Seems like text messages are already starting to go that way, with the unlimited options offered. The average teen mentioned above, with 2,899 text messages per month, is getting a pretty good deal with a $20/month unlimited text plan. It comes out to about 0.7 cent each.
How the hell somebody could go through nearly 3,000 texts is beyond me, tho’ …
OK OK it’s a markup of 500%…
” width=”19″ height=”19″ alt=”smile” style=”border:0;” />
There’s nothing to revolt about, they own the service, they make the price, we choose if we want it, TXT is not an essential. If there should be a revolt, it should be against the Movie Theatre business, NOW THERE’S A SCAM!!!
if data is data then why do we pay separate rates for phone calls AND internet access? its all just data now right?
CLIQ, bitch!
http://www.motorola.com/Consumers/US-EN/Consumer-Product-and-Services/Mobile-Phones/ci.Motorola-CLIQ-US-EN.services
I say bandwidth is bandwidth.
Sell it to me at a reasonable price and I’ll worry about what I do with it.
how long? as long as we keep paying for it..
This has always enraged me. The carriers are treating us like we are idiots. It may cost them 1/3 of a penny to text, but the alternative is a phone call which cost them MUCH more. They should give discounts for text usage. Someone start a petition or something.
Admit it, frothing right wingers. You want the government to step in and regulate this blatant SMS theft. Don’t deny it. Deep down, you know you want it.
“How much longer will the carriers’ great SMS ripoff last?”
As long as their customers continue to pay the price.
Teens should have their SMS yanked! And their damn cell phones too!
I can see a justification for carriers to charge more for voice calls. The connection has to be persistent and real time. That takes more resources than an equal amount of data that is composed on one machine, sent in pieces, and assembled on another machine.
Of course, the carriers charge the most for the services that are the least demanding on resources and therefore cost them the least to provide. They are the newest services and customers have the least expectations of what they should cost.
@ Rob–
Don’t be an idiot.
This isn’t a political discussion, but if you want to make it one, at least know which side to take!
Republicans are for less government.
The government shouldn’t interfere with capitalism. Like it or not, as long ad people continue to pay, they will continue to charge, an rightfully so.
A product’s value is only as much as a buyer is willing to pay. In other words, if you’re paying for it, it’s worth it.
If you don’t think it’s worth it, then don’t pay for it!
It’s as simple as that; vote with your wallet. You may bitch about it all the way, but if you continue to pay, you are justifying the charge!
This practice will persist until competition forces them to change. Possibly a service that uses the data connection of the iPhone that can still integrate with the SMS system of normal phones? Twitter would sort of work, but seems too public to me.
and in this case, Adam Smith would argue, the invisible hand should adjust prices for text messaging downward. Except that the market is imperfect; all cellular companies are NOT created equal; they don’t have the same coverage patterns, they offer incentives to keep you tied to their networks (in-network calls free), and until recently, there was no phone number portability. Whether the companies collude to maintain SMS tariffs artificially high or not, the fact remains that it happens because it can happen; there are sufficient barriers to entry in the cellphone industry that the odds of an new company establishing itself in the market are, by my reckoning, somewhere between slim and none.
It will be interesting to see what happens with Cricket mobile – $35/month for unlimited voice and text.
I’d done the math on this ages ago, and every time I get a text message (and that costs me–even though I can’t turn the service off!) I get royally pissed.
I even talked with an ATT rep at a local store about this, and he said the “reason” was that ATT routes every single text message through one data center they have, and the servers are over-stressed, so they need to charge a lot in order to keep texting traffic low. I called BS on the guy in the store, but obviously he’s a low level employee and can’t affect change.
It’s really astounding people are paying $.15-.20 per message, or $30/month to send tiny snippits of data that should be part of the unlimited data plan. Astounding.
BTW, now that AIM does background push, I have told people to IM my phone number. I get texting for free (well, included in unlimited data charges) that way.
Don’t be an idiot.
This isn’t a political discussion, but if you want to make it one, at least know which side to take!
Republicans are for less government.
LOL! I see my comment went right over your head. Try reading it again (or several times, if necessary), and see if the light bulb comes on.