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What Carriers Don't Want You To Know About Texting

timothy posted more than 5 years ago | from the what-the-market-will-bear dept.

Cellphones 570

An anonymous reader writes "Randall Stross has just published a sobering article in The New York Times about how the four major US wireless carriers don't want anyone to know the actual cost structure of text message services to avoid public outrage over the doubling of a-la-carte per-message fees over the last three years. The truth is that text messages are 'stowaways' inside the control channel — bandwidth that is there whether it is used for texting or not — and 160 bytes per message is a tiny amount of data to store-and-forward over tower-to-tower landlines. In essence it costs carriers practically nothing to transmit even trillions of text messages. When text usage goes up, the carriers don't even have to install new infrastructure as long as it is proportional to voice usage. This makes me dream of the day when there is real competition in the wireless industry, not this gang-of-four oligopoly."

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Correlation (5, Insightful)

conureman (748753) | more than 5 years ago | (#26248739)

The feckless youth I see texting in public do not appear to be the sort who employ reason or critical faculties. That's the kind of customer base dreams are made of.

Re:Correlation (5, Insightful)

Anonymous Coward | more than 5 years ago | (#26248811)

That's because their parents are the ones footing the bill... ouch.

Re:Correlation (4, Informative)

BobReturns (1424847) | more than 5 years ago | (#26248841)

If they need to send a short message to someone it's not like there's a viable alternative - it's really the only game in town.

Re:Correlation (2, Insightful)

TheRaven64 (641858) | more than 5 years ago | (#26248977)

But when it costs around the same amount as a minute of telephone call, I can't help wondering if they would be better off just making a short call...

Re:Correlation (4, Funny)

Dachannien (617929) | more than 5 years ago | (#26249037)

But when it costs around the same amount as a minute of telephone call, I can't help wondering if they would be better off just making a short call...

But that would be, like, totally lame! (or ghey, or whatever it is those whippersnappers are saying these days)

Re:Correlation (1)

Nyckname (240456) | more than 5 years ago | (#26249101)

You can't make voice calls during an chemistry test.

Re:Correlation (5, Funny)

Anonymous Coward | more than 5 years ago | (#26249187)

Or during an grammar test.

Re:Correlation (1)

Ender_Stonebender (60900) | more than 5 years ago | (#26249119)

Unfortunately for today's youth, it's difficult to make a voice call in the middle of class without attracting the attention of the teacher. With text messages you can avoid this. You can also avoid having to wait for the person to pick up the phone, or for the phone to kick over to voice mail.

Yes, there a lot of things for which making a voice call is the better solution. But that doesn't mean that there are no circumstances under which a text message would work out better than a voice call.

Re:Correlation (0)

Anonymous Coward | more than 5 years ago | (#26249127)

This is quite preposterous.

In the UK I get 300 free messages (equivalent of £30) for a £10 top up every month.

To CONNECT to another phone will cost a minimum of 30p generally.

Work it out yourself.

Re:Correlation (0)

Anonymous Coward | more than 5 years ago | (#26249185)

Work it out yourself.

You're getting ripped off and like it?

In Soviet Russia... (1)

I'm not a script, da (638454) | more than 5 years ago | (#26249217)

${NOUN} ${VERB}s YOU!!!

What a country!

Re:Correlation (4, Interesting)

mollymoo (202721) | more than 5 years ago | (#26249137)

Better off financially? Almost certainly, particularly as text conversations are frequently longer than one message each way. But I don't think that's the point. Calls require an instant response and a lot of attention an you can't really multicast voice as effectively. Setting up even a 3-way call takes longer than writing a short text ("Pub tonight?") and sending it to half a dozen friends. Texts, like emails, can be responded to at your leisure. I prefer to receive texts than voice calls for that reason. A-la-carte texts can be absurdly expensive, but packages (available with many hundreds of texts per month if you're a heavy user) will hardly break the bank.

The bandwidth comment in TFS is curious - the bandwidth for voice is also there whether you use it or not as well. Mobile voice and landline networks work that way too - mostly fixed infrastructure costs for the operators, but a pay-per-use model for the consumer. It's nothing new. Increasingly commonly, broadband works like that as well.

Re:Correlation (5, Insightful)

michael021689 (791941) | more than 5 years ago | (#26249215)

There are reasons a lot of us prefer texting over a call in most situations.

Calling represents a loss of time - you have to be somewhere away from others(if you are polite), wait as the phone rings, wait as you go over formalities, finally say what you needed to say, and then hang up. That is all a pain in the ass to us whippersnappers. Not to mention the annoyance of not getting an answer and having to wait to leave voicemail...(which is quite similar to a text, other than that it takes longer to convey a message and if something is missed it has to be replayed..)

Texting is more polite. Although I know many over thirtys who disagree, many younger people often do not consider it impolite to receive and send text messages in public or with company (within reason, it can't distract you completely). Beyond that, sending a text does not heavily interrupt the day of you or your contact, unlike a phone call.

Essentially, texting gets the same job done faster and with less hassle.

Re:Correlation (5, Interesting)

WDot (1286728) | more than 5 years ago | (#26249233)

I disagree. To get the equivalent of a text message in a short call, I would have to say "My plane landed safely in Phoenix, I love you, bye," and then hang up before they have a chance to respond. I use phone calls for conversations, even short ones. However, if I can fit the entire conversation into 160 characters, I use a text message instead.

I, like almost everyone else on Slashdot, think that text message rates are exorbitant, but I have no room to talk since I signed up for a plan. Yes, I'm a "feckless youth" like conureman says, but I pay out of my own pocket for my plan. I justify it to myself by saying that I'm paying for convenience, and I am.

Re:Correlation (2, Funny)

3vi1 (544505) | more than 5 years ago | (#26249053)

You're right, it's the only way.

Maybe one day some one will invent a way that the two people could use their phones to exchange messages by voice, saving all of the time wasted punching out misspelled words.

Or, if it's not in need of immediate attention, maybe they could invent a way to "record" a message into a "voice mailbox".

Re:Correlation (3, Interesting)

Nazlfrag (1035012) | more than 5 years ago | (#26248963)

You were once those feckless youth, and I'm sure believed what you had to say was of utmost importance. We have been conned into thinking that text messages actually cost the network operators anything, but while this is to do with the critical faculties of the general public it isn't about those teenagers utilising our new social conference ground. They are wiser than you assume.

Isn't exactly news (5, Insightful)

A beautiful mind (821714) | more than 5 years ago | (#26248741)

...but it's good to see this fact receiving some mainstream attention. I guess it's inevitable that people now tend to ask that if it costs x dollars to transfer y megabyte from my phone, why do text messages cost a lot more when they are so tiny? In the digital age text message fees seem more and more ludicrous even to ordinary people.

Re:Isn't exactly news (2, Insightful)

alx5000 (896642) | more than 5 years ago | (#26248915)

And that's why the news on slashdot should be that a major paper is shining some light onto the issue for the uneducated masses to see, instead of the current story.

I can safely bet that it's going to elicit some dozen 'Duh! We already knew that'-comments.

Comparison (1)

Yaotzin (827566) | more than 5 years ago | (#26249239)

I live in Sweden, I pay 0.69kr SEK (~9 cent USD) for each text message I send, and every third month there is no charge att all for texting. The only requirement is that I use services for at least 49kr SEK (~$6 USD) every month.

This makes me dream... (5, Funny)

TuaAmin13 (1359435) | more than 5 years ago | (#26248743)

Of when we'll be nickled and dimed for text messages instead of quartered.

Re:This makes me dream... (5, Interesting)

arashi no garou (699761) | more than 5 years ago | (#26248999)

I'm still looking forward to the day when I'm only charged for what I send, not what I receive. I have two phones on my account, one for me and one for my fiancee, and before I added a texting package any time one of us texted the other my account was charged twice. Once for the sent message, again when it was received. I honestly believe the cell companies do this to force you into a texting package.

Re:This makes me dream... (4, Interesting)

Anonymous Coward | more than 5 years ago | (#26249099)

I still think it's pretty funny that Americans have to pay to send and receive texts.

I'm not sure of many, if any, other countries where this happens.

Re:This makes me dream... (4, Interesting)

mprindle (198799) | more than 5 years ago | (#26249103)

Just recently I had to battle with an AT&T rep to get 18 text messages on my phone and 18 on my wifes phone credited back. They came from an unknown source and they all had two letters in them that was pointless. After talking to the rep for 10 mins or so he finally consented and gave us credit for them. I forgot to mention that I don't have a texting plan so each message received, that I didn't want or ask for, was going to cost me .35 each!

Re:This makes me dream... (1)

arashi no garou (699761) | more than 5 years ago | (#26249149)

Ouch, that must have been recently then. It was 20 cents each for me when I decided to add the package. I had no idea it was so much now.

SMS messages where an afterthought (4, Insightful)

msgmonkey (599753) | more than 5 years ago | (#26248749)

As a service that the operators could milk their customers with. It was only when it started getting popular that they heard the cha-ching sounds and start charging outrageous fees.

duh (2, Insightful)

iduno (834351) | more than 5 years ago | (#26248757)

Spose its just me since I've worked on mobile phones for 3 years but I already knew this. Its not that the messages cost anything like that. its that they can so its done. If they could still get away with charging $10 per minute for a phone call they would do the same thing.

Goodness gracious me (5, Funny)

hobbit (5915) | more than 5 years ago | (#26248759)

Next you'll be telling me that when you buy Coca-Cola, you're mostly just getting sugar and water!

Re:Goodness gracious me (5, Informative)

FroBugg (24957) | more than 5 years ago | (#26248785)

High-fructose corn syrup. You've often gotta pay more for Coke if you want it with sugar.

Re:Goodness gracious me (3, Interesting)

CrackedButter (646746) | more than 5 years ago | (#26248837)

Only outside the US as far as I know. Everywhere else uses sugar, not that that makes any difference since I don't drink fizzy pop.

Re:Goodness gracious me (1)

hjf (703092) | more than 5 years ago | (#26248945)

I'm in Argentina. Coca-cola labels say it has HFCS.

Re:Goodness gracious me (3, Funny)

z_gringo (452163) | more than 5 years ago | (#26248955)

When they say "everywhere else", that means Mexico.

Re:Goodness gracious me (0)

Anonymous Coward | more than 5 years ago | (#26249183)

When they say "everywhere else", that means Mexico.

And Canada. Nobody remembers them.

Re:Goodness gracious me (2, Informative)

Anonymous Coward | more than 5 years ago | (#26249113)

Around Passover time in the US they actually make Coca Cola with sugar in it, at least in the NY area and places with large Jewish populations.

Re:Goodness gracious me (5, Insightful)

Anonymous Coward | more than 5 years ago | (#26249081)

World prices for sugar is about 1/5 that of sugar costs inside the USA.

HFCS is less expensive in the US than sugar.

The artificial prices of sugar and the artificial price of corn leads the USA to use corn for sweeteners and corn to make ethanol.

The solution is to stop propping up the US sugar companies. If C&H cannot compete on the world market, then let them fail. Why should the population of the US prop up an industry which has had many many decades to compete on the world market.

This just in... (5, Funny)

geekmux (1040042) | more than 5 years ago | (#26248771)

Addictive behavior (texting) + Monopolistic cellular rule over addictive technology = obscene rates.

Even Larry Ellison is sitting back looking at his cellular bill going "Holy shit. And I thought I ripped people off."

Um what? (4, Interesting)

imroy (755) | more than 5 years ago | (#26248789)

The truth is that text messages are 'stowaways' inside the control channel â" bandwidth that is there whether it is used for texting or not â" and 160 bytes per message is a tiny amount of data to store-and-forward over tower-to-tower landlines.

From what I understand, the problem with SMS's sent on the GSM standard is that it is in the control channel - as the anonymous submitter stated. But there's only one control channel for each cell versus many data (voice, etc) channels, and it has a lot less bandwidth than even one data channel. It was only ever meant to handle connecting calls, phones moving from one cell to another, etc. Administrative stuff. SMS was never meant as a proper way to move lots of messages. But it's now a major form of communication and it's using a channel (the control channel) that is very limited.

When "text usage goes up", I'm guessing the only thing the carriers can do is to install more cells in order to get more control channels. But surely there's a limit to how many cells can co-exist in a given area. But everyone's moving to various "3G" networks and AFAIK they have proper means to send messages, photos, videos, etc. The anonymous submitter is still an idiot though.

Re:Um what? (4, Informative)

TheRaven64 (641858) | more than 5 years ago | (#26248849)

It's been possible to send SMS via GPRS for a long time, and now it is mostly sent via UMTS or GPRS, rather than the GSM side channel. This means that it costs as much as any other kind of data. Even if there is a 100% protocol overhead, at 5Â/message you're paying $164/MB.

And people wonder why I don't text...

Re:Um what? (2, Insightful)

rtfa-troll (1340807) | more than 5 years ago | (#26248965)

It's been possible to send SMS via GPRS for a long time

Possible in theory, but it mostly doesn't work in real life. Many mobiles have broken support for this. Many networks have broken support for this. If your customer changes from one mobile with support to another without it's a complete pain to make sure everything works right. Finally, even in this case, the SMS mostly travels over the SS7 network which is not well designed for user data.

Personally I like that SMS is expensive. I don't get SMS spam and it means that mostly I know that an SMS contact is something important. I agree with you, however, that SMS is a totally stupid thing and everybody should be using email or instant messaging instead.

Re:Um what? (1)

TheRaven64 (641858) | more than 5 years ago | (#26248989)

Maybe in the USA this is uncommon, but my last two mobiles have had the 'send SMS via GPRS' flag set when I got them. The one before that didn't have it set by default, but setting it didn't I got the phone didn't appear to break anything. Sadly, it didn't make SMS any cheaper either.

Re:Um what? (1)

abigsmurf (919188) | more than 5 years ago | (#26248995)

And just imagine how much it would cost in bandwidth to handshake every minute through GPRS to check if there are any texts.

Re:Um what? (1)

extremescholar (714216) | more than 5 years ago | (#26249011)

Since I can get unlimited text, but my web useage is more, I suggest someone code an interface that transfers web pages (and anythign else) via text messages... It's like off-line browsing, but it could be near real time.

NYTimes is baloney (0)

Anonymous Coward | more than 5 years ago | (#26248865)

##(Verizon Wireless would not speak with me, either, nor would it allow Mr. Kohl's office to release publicly its written response.)##

Uh, Senaturd Kohl of Wisconsin can release any damn thing he pleases. And ANY and ALL correspondence sent to anybody is owned by the recipient who can publish it as they please.

The Honorable Senaturd is finagling for a (ahem) campaign donation.

The New York Slimes is hiding the fact this criminal overcharging was caused by Democrats. It's another version of the Community Reinvestment Act. They got one thing right though, text messaging is without additional overhead.

Re:NYTimes is baloney (1)

betterunixthanunix (980855) | more than 5 years ago | (#26248969)

I am only responding to you, an AC, because you clearly missed an important fourth leg of the US IP system: trade secrets. Trade secrets live just beyond the law, but the government still protects them when possible. These cell carriers probably told the senator that the information they sent him constituted a trade secret, and nothing more needs to be said. You see the same sort of behavior in courts, presumably keeping everything in public records, except trade secrets, which may be discussed privately with the judge.

wrong on trade secrets (0)

Anonymous Coward | more than 5 years ago | (#26249123)

If a court compels testimony, only sometimes is it sealed.

Communications with Kohl's office wouldn't fall under this. A hearing in the Senate is sometimes secret, but mostly for military matters. Not in this case.

Kohl is pulling your leg.

Re:Um what? (3, Interesting)

betterunixthanunix (980855) | more than 5 years ago | (#26248925)

Yes, the control channel is bandwidth limited, but a text message is only 160 bytes. The control channel has a transmission rate of 270kbps. Do the math; literally hundreds of text messages per second could be sent over the air via a single cell.

It is almost always the case that voice channel usage and text message usage increase in proportion with each other. A cell can handle far more simultaneous text messages than voice calls, however, so new cells would need to be installed to take care of the voice channels first, and so as the NY Times article points out, it literally costs the cell provider nothing to provide text messaging.

Re:Um what? (1)

bytesex (112972) | more than 5 years ago | (#26249007)

Yes, and tens of thousands of phones could be inside a single cell at a given time if, for example, that cell covered a train station or a sports stadium, where both kinds of locations give ample rise to sending simultaneous messages by the thousands during certain events (delays or goals).

Re:Um what? (4, Interesting)

betterunixthanunix (980855) | more than 5 years ago | (#26249073)

And voice traffic increases in such situations as well (perhaps not as much for your stadium, but that is really an edge case). Go to your local urban intercity rail station; you'll see a lot of people talking on their phones. You'll also see a lot of people typing text messages. If you had the equipment, you would also see that the station is covered by multiple towers from multiple carriers, and that the number of people simultaneously sending texts, as opposed to typing the text and preparing to send it, does not exceed a couple hundred per second. It is very unlikely that the limit on text bandwidth would be reached before the limit on voice bandwidth; possible, sure, but not very likely.

Do the math (2, Informative)

baffled (1034554) | more than 5 years ago | (#26249115)

I don't know actual numbers, so let's be conservative.

Let's say the average customer sends 1 text per day, and all these texts occur during a prime 8-hour window.
(1 text/day) / (8 hr/day) / (60 min/hr) / (60 sec/min) = 3.47e-5 texts/sec/customer average

Now let's assume each message uses 300 bytes with overhead, and let's assume each tower handles 100,000 customers (conservatively):
(3.47e-5 text/sec/customer) * (300 bytes/text) * (100,000 customers) = 1041 bytes/sec

So with these insanely conservative numbers, cell towers only require 8 kbps bandwidth for text messages.

Re:Do the math (1)

mollymoo (202721) | more than 5 years ago | (#26249249)

Your numbers are, erm, interesting. You seem to be assuming that texts are sent at the same rate at 4am as they are during the commercials of a popular TV program. And 100,000 customers per tower? Erm, no. You're out by a couple of orders of magnitude.

Re:Um what? (3, Informative)

sjames (1099) | more than 5 years ago | (#26249151)

The idea behind the text message is that the phone and the base must handshake periodically no matter what, and the packets used for that have a minimum fixed size. They can either be padded with 160 nulls or contain a text message. That means that the text message costs literally nothing in terms of bandwidth on the control channels.

I'm in Japan for six months... (5, Interesting)

Anonymous Coward | more than 5 years ago | (#26248831)

In Japan there's this magic concept. The $30 plan actually costs $30! Go figure! A brand new cell phone is also free with no contact. And you can watch TV for free on your cellphone. But, don't let the Americans know or they'll want decent service too! ...oops!

Re:I'm in Japan for six months... (0)

Anonymous Coward | more than 5 years ago | (#26249121)

Apt?

Re:I'm in Japan for six months... (2, Informative)

Tsian (70839) | more than 5 years ago | (#26249175)

Except that that isn't really true anymore anymore. Phones cost around $500, but the major carriers break that out into monthly payments, and give subsidies for agreeing to a long term contract -- generally 2 years (the system variest from Carrier to carrier, but that is basically the situation with AU, Docomo, and Softbank).

The $30 voice plan does cost $30, but then you add in the data plan and you add $10~$42 / month depending on use. And e-mail useage counts towards data use (there are systems analagous to text messaging, but phone e-mail basically plays the role that texts do in America/Canada/Europe).

There is of course still tax and the Universal Access Fee. But, there aren't any "system access fees".

Certainly the plans are generally better and more clearly advertised in Japan, but the situation has changed coinciderably in the last few years.

Failed economics class (2, Insightful)

ucblockhead (63650) | more than 5 years ago | (#26248835)

Classic economics says that things are priced what people are willing to pay for them, and are not based on how much the cost to make.

As long as people are willing to pay 10 cents per text, that's how much carriers will charge, regardless of how many there are.

Re:Failed economics class (5, Insightful)

Anonymous Coward | more than 5 years ago | (#26248893)

No, apparently you failed economics.

If there is sufficient competition in the market profits will be driven to zero and the price of the service will approach the *actual* cost of providing it (which is close to zero, apparently). The fact that text messages cost 1000s of times more than they should indicates that there is insufficient competition in the industry, excessive barriers to entry into the market, etc.

Re:Failed economics class (0)

Anonymous Coward | more than 5 years ago | (#26248953)

This, by itself, is false. See Monster Cable.

Re:Failed economics class (1)

rhyder128k (1051042) | more than 5 years ago | (#26248975)

And this is my problem with the submitted summary. The cost of providing the service must include the cost of setting up and operating the infrastructure. It's irrelevant that the SMS piggybacks on another service and that the cost of sending one message is close to zero.

There's plenty of competition amongst mobile phone carriers. Maybe one of them will offer free texting, in order to get get ahead of the competition. Such a company would have to hope that the losses from the lack of SMS charges would be compensated by a greater number of customers.

It's similar to people who complain that books are overpriced because they are being sold for more than the cost of manufacture.

Re:Failed economics class (0)

Anonymous Coward | more than 5 years ago | (#26249209)

The cost of providing the service must include the cost of setting up and operating the infrastructure.

You mean the govt provided freebee to rollout "highspeed wireless infrastructure"?

There's plenty of competition amongst mobile phone carriers.

Ok, lets count. There's what, 3? 4? in the US; really only two if you want good coverage everywhere.
And without google joining the club it looks like there won't be any more anytime soon.

It's similar to people who complain that books are overpriced because they are being sold for more than the cost of manufacture.

If you're buying a notepad with no writing in it and:
- paying 1000x the production price
- AND there's only two notepad vendors who collude to keep prices artificially high.
- AND a government granted/enforced monopoly preventing anyone else from making notepads
- AND your tax dollars built the notepad factory

Then yes, I think you might have the right to complain at least a little.

Re:Failed economics class (1, Informative)

ect5150 (700619) | more than 5 years ago | (#26249051)

All prices are based on both Supply and Demand. Not one or the other. Both of you, please remember this for your economic analysis.

Re:Failed economics class (5, Informative)

guacamole (24270) | more than 5 years ago | (#26248909)

Not really. In classical economic theory: the market price can be one of the following:

1. Essentially the cost of making the product (firm's economic profits are 0). This arises in the model of perfect competition only.
2. Each consumer pays the highest price this person can afford. This arises only in the model of monopoly with a perfect price discrimination.
3. Everyone pays a single price, but the price is set by the single producer for the purpose of maximizing this producers profits. This is the model of monopoly with no price discrimination.
4. Anything in between. Various models of oligopoly will render the equilibrium prices that are anything in between (1) and (3). There is no single model of oligopoly. So, each setting has to be analyzed separately (usually with the tools of game theory) based on the relevant assumptions.

Re:Failed economics class (1)

freeweed (309734) | more than 5 years ago | (#26248961)

Not at all.

People are only willing to pay 10 cents per text IF there's no one else offering it cheaper.

Virtually any consumer good/service started out this way: "As long as people are willing to pay $250,000 for a car, that's how much manufacturers will charge, regardless of how many there are". Oops, until Mr. Ford came along and dropped the price.

The difference with cellphone carriers is that none of them want to act like Mr. Ford. It's the complete opposite of classic economics, or at least capitalist economics.

We saw it up here in Canada; absolutely no one was willing to pay for incoming text messages - until EVERY SINGLE CARRIER started charging for them at the same time. Suddenly, everyone was willing to pay for them. Funny how that works.

Re:Failed economics class (1)

agallagh42 (301559) | more than 5 years ago | (#26249203)

Not at all.

We saw it up here in Canada; absolutely no one was willing to pay for incoming text messages - until EVERY SINGLE CARRIER started charging for them at the same time. Suddenly, everyone was willing to pay for them. Funny how that works.

Except that Rogers didn't start charging for incoming texts, only Bell and Telus. I don't think 2 out of 3 counts as EVERY SINGLE CARRIER.

Somehow, Bell and Telus still have some customers though...

SMS more expensive than Hubble (1)

rHBa (976986) | more than 5 years ago | (#26249247)

I'm sure I remember reading a few years ago that sending an SMS costs you more per byte than receiving data from the Hubble telescope.

That's including the cost of building it, deploying and repairing the telescope!

Of course that was a few years ago so assuming that Hubble doesn't need any more repairs for a while it's getting even cheaper!!

Commercialistic evil (1)

Techmeology (1426095) | more than 5 years ago | (#26248845)

Remember: these people are in the business of making money. If they can charge many times their cost to send text messages, they will. There are far too many things in this world that are governed by money, not that which is technologically possible. And as a scientist - there's a certain lack of purity in that, which I very much dislike.

Not just for costs, but to keep demand down (2, Insightful)

iJusten (1198359) | more than 5 years ago | (#26248853)

When text usage goes up, the carriers don't have to install new infrastructure as long as it is proportional to voice usage.

Quiz time! What will happen if the price of text messages goes down? Will it INCREASE or DECREASE the use of text messaging compared to voice usage? People never seem to get that the product price is not only the costs+profits, but also the additional costs if the demand grows larger or smaller. I imagine the operators have found the ideal text/voice ratio and are pricing the product so that the maximum capacity of the current network is in use. I don't know about USA, but at least in Europe the youths prefer using text messages over talking, so keeping the ratio in the sweet spot might be somewhat hard. In Finland cost for both voice-per-minute and text are 6,9 eurocents (that's what? 8 american cents?), pretty much from every operator you can name. How much do they cost in your part of the world?

Re:Not just for costs, but to keep demand down (1)

betterunixthanunix (980855) | more than 5 years ago | (#26249035)

"I imagine the operators have found the ideal text/voice ratio and are pricing the product so that the maximum capacity of the current network is in use."

Except that is not even close to how it works. The network is not at its maximum capacity, except in a few very heavily populated areas, and even there, new towers are constantly put up to prevent the usage from remaining at maximum capacity for long.

"I don't know about USA, but at least in Europe the youths prefer using text messages over talking, so keeping the ratio in the sweet spot might be somewhat hard."

Unless you have colonies of youths living together, it is not likely that the ratio of text to voice traffic is disproportionate. Keep in mind that a single tower can handle a much larger volume of text messages than voice traffic.

"In Finland cost for both voice-per-minute and text are 6,9 eurocents (that's what? 8 american cents?), pretty much from every operator you can name. How much do they cost in your part of the world?"

Depends on the carrier. My carrier (T-Mobile), had I not been smart and taken the text message deal (500 messages for $3/mo, and I do actually text enough to make it worth that price over the non-deal price) when it was offered 7 years ago, would charge me 20 cents per text message, and 15 cents per minute over my plan (1000min/mo.). This is for both incoming and outgoing calls and texts.

Re:Not just for costs, but to keep demand down (1)

aoteoroa (596031) | more than 5 years ago | (#26249039)

Quiz time! What will happen if the price of text messages goes down? Will it INCREASE or DECREASE

Some would suggest reducing the cost or messaging will also *DECREASE* the total usage. And that current price increases in messaging have actually INCREASED messaging usage. Back when I was paying $.05 per message I sent a few texts, but when they bumped the price up to $.20 per message, and started charging for incoming texts I (like many people) signed up for an unlimited text package. Now the millions of people who have unlimited text packages can send and receive as many texts as they want. When the companies increased the cost for individual text messages they were not trying to reduce usage, they were trying to get people to sign up for the text packages.

== No Texting for me (1)

jjackalb (574662) | more than 5 years ago | (#26248887)

I have a data plan, but I just refuse to text until it is reasonably priced.

Same old arguments (1, Insightful)

abigsmurf (919188) | more than 5 years ago | (#26248891)

Everytime text messaging's 'true cost' is shown in an article they all make the same assumptions and selectively look at information to show just how much people are being ripped off.

Yes it uses a control channel that existed already. That doesn't mean this said channel hasn't had to be beefed up, the signal quality improved everywhere as what was acceptable for the odd, low priority message isn't good for large amounts of bandwidth being thrown around. Just like phone lines weren't designed for data but when they started being used for it, phone companies had to go around improving exchanges, replacing old wiring etc.

160bytes isn't much but that's still data that has undergo handshaking, be routed around a limited bandwidth network, processed to find the destination then sent to the destination phone. It's incredibly inefficient to do this for a small amount of data. It's also incredibly costly to manage lots of minuscule transactions. To price it on pure bandwidth costs is stupid. It costs phone companies a hell of a lot more to send 1000 texts than it does for a 3G user to download a 160kb image.

It's true for pretty much every business everywhere that if you do things in incredibly tiny properties, you're going to be charged through the roof. If I did a home delivery service from a supermarket and bought just 1 banana, that banana would cost me £5.10. If I ordered 100, each banana would cost me £0.15. It doesn't matter than my house is on the delivery truck's route and they'd use no additional petrol and only minimal time to deliver the single banana, I would still have an incredibly expensive banana.

Re:Same old arguments (0, Troll)

hjf (703092) | more than 5 years ago | (#26249003)

you, sir, are an asshole.

1. it doesn't use the control channel: sms can be sent over GPRS which is a data channel.
2. 160 bytes isn't much data. period. even 1 second of voice require MUCH MORE routing: each packet needs to be routed individually.
3. IT DOESN'T COST MONEY TO COMPANIES! WHERE DO YOU GET THAT IDEA? Dude, seriously: it doesn't. Period. They have their own networks, data flows freely inside the network, why the hell does it cost money? Once infrastructure is paid (and with billions of text messages sent every day, it's paid for pretty quickly), it's FREE. The only cost is electricity, which is a few dollars a day for each cell out there.
4. Your argument for the banana is the stupidest thing I ever heard. Seriously dude, you need to rethink a lot of things if you think you can compare bananas in a supermarket to text messages.

Re:Same old arguments (1, Insightful)

abigsmurf (919188) | more than 5 years ago | (#26249129)

Yes, how dare I voice my views on a subject! Truly I am the lowest of the low!

1. they can but not all networks and phones have full support for these kinds of texts. Do you really want to have to wonder if someone can get a text from you or not? Also, GPRS would have to keep pinging towers to check for messages. This would cost a fortune over a year at GPRS rates or you'd have to sign up for a monthly charge like with push email services.

2. It's still data that has to be handshaked at both ends. Establishing a data connection is the most costly part.

3. Amazingly enough, networks aren't free. There are costs for equipment, there are costs for staff, there are costs for licensing a radio frequency. The more data they have to process, the more expensive the equipment they have to have, the better quality transmissions they need to send and receive. The busier a network, the more money needs spending to maintain and upgrade.

4. Wow that totally refutes everything I said! Who needs a reasoned argument when you can say "that's stupid" and not say why. It's a metaphor to show how buying things in tiny quantities is expensive.

Re:Same old arguments (0)

Anonymous Coward | more than 5 years ago | (#26249181)

regarding 2.
Voice data is circuit switched. Once a call is established, usually no more routing is necessary. Of course much more bandwith is needed for a voice call than for a text message.

regarding 3.
Where do you get the idea from, that transfering text messages does not cost money for carriers ? For every text message you send, the mobile network has to query several databases to look up the location of the receiving handset (VLR,HLR,etc...) and route the SMS. In addition If your handset is off, the SMS has to be stored in the network (SMS center) for delayed delivery. Storage space is not an issue here, the associated message flows between the network control systems are costly. And these costs increase with every SMS the network has to handle.

I also think text messages are overpriced, but it is not like they are for free for carriers.

Re:Same old arguments (1)

marco.antonio.costa (937534) | more than 5 years ago | (#26249237)

OK, lets try this argument then: it's THEIR infrastructure. Nobody is forcing you to use their text services, so don't be their customer anymore.

This 'cost to produce' pricing argument is absolutely imbecile. Companies exist to make a profit. You think that infrastructure is 'put in place' and they forget about it? Capital needs to be replenished and that ( and R&D ) comes from profits.

If companies should be forced to charge texting 'at cost' and they can't pass on these costs to the consumers because competition would put them out of business, then you are simply handicapping the formation of capital which will lead to higher prices and worse service in the future.

Re:Same old arguments (2, Interesting)

baffled (1034554) | more than 5 years ago | (#26249165)

It costs phone companies a hell of a lot more to send 1000 texts than it does for a 3G user to download a 160kb image.

It's true for pretty much every business everywhere that if you do things in incredibly tiny properties, you're going to be charged through the roof.

Yes, which explains why my x86 processor crunching 3 billion incredibly tiny instructions per second costs me millions of dollars to operate, and my gigabit ethernet lan sending millions of incredibly tiny data packets per second is just as costly.

How on earth did you get modded +4 insightful.

THOSE FUCKERS! (0)

Anonymous Coward | more than 5 years ago | (#26248905)

Rotten, rotten, rotten... Back to smoke signals then?

It is less than 160 bytes! (2, Interesting)

Terje Mathisen (128806) | more than 5 years ago | (#26248913)

The SMS channel uses 7-bit ascii, so those 160 characters are only using 140 bytes.

Charging for receiving messages, which some US carriers seem to do, is just adding insult to injury.

Terje

Re:It is less than 160 bytes! (3, Interesting)

Paradigm_Complex (968558) | more than 5 years ago | (#26249105)

In this case I believe "byte" is revalued at 7-bits. It's still 160 bytes, just now it's 1120 bits instead of 1280 bits.

The bandwidth is "free", but it's limited (0)

Anonymous Coward | more than 5 years ago | (#26248933)

While it is true that Short Messages are sent in the control channel, therefore don't use up bandwidth which could be used for other billable services and are consequently "free", the bandwidth in the control channel is limited and can't be increased: High demand, limited supply = high price.

It was all a great idea, but nowadays it's just stupid, because there is a viable alternative to using the control channel for messaging: packets. GPRS and UMTS/3G offer communication outside of connections through packet based protocols. These protocols are used for multimedia messaging, but instead of also using them to send and receive text messages, which would cost fractions of a cent that way, SMS are still sent via the control channel. The inertia is incredible. Consumers should learn about packet based IM on cellphones, but they apparently prefer to stay ignorant of the technical possibilities and keep paying a premium for a few bytes of SMS.

Gang of four - - Really? (1)

bwave (871010) | more than 5 years ago | (#26248937)

Is there really 4 players in the wireless market? I live in the mid atlantic and t-mobile is non-existant with barely 1 signal bar coverage along the 2 major highways, and zero bars in both the metro core and suburbs. Sprint/Nextel has slightly better coverage with good signal along the highways, mediocre coverage downtown, with medium coverage in the suburbs with LOTS of holes in coverage. AT&T has good coverage everywhere, however, their mobile data service is dialup speed, nothing high speed in our area. Verizon has amazing coverage and high speed everwhere, but it's Verizon! It's like selling your soul to the devil. Pretty much there is a mononpoly, Verizon, that is it. Maybe you can say there's a Duopoly, but AT&T only has the people that got kicked off Verizon for non-payment, etc. There definately needs to be more players in the marketplace, you shouldn't have to spend $100++ a month for service. I barely use my phone, so I use Verizon's pay-as-you-go which is a fair deal @ $30 a month with no taxes, but $0.10 per text, so I hate when I receive those. If texting were free I'd be pretty happy with price. I just hate the cheapest plan is $39.95 a month + taxes = $46.xx + texting plan = $56.xx a month. So,the $30 gophone works for me, because I can do 250 texts and still be cheaper than a plan.

Socialism is the answer (0)

Anonymous Coward | more than 5 years ago | (#26248957)

Smash capitalism with workers revolution!!!!

Re:Socialism is the answer (0)

Anonymous Coward | more than 5 years ago | (#26249093)

Didn't the Russians do just that in 1917?

There is some cost involved (0)

Anonymous Coward | more than 5 years ago | (#26248959)

Undoubtedly there is truth to the article posted. However while the bandwidth is there, the mechanism to store and forward messages is not given nor does it come for free. There are companies selling servers that perform the arduous task of receiving and sending sms's -- servers as IT servers with storage arrays, multi core cpus and expensive hardware to interconnect them to the telco interfaces. All that gear, hardware+software cost thousands of $ that the telco providers need to invest in.

Despite that, of course, text messaging is, without question, a great revenue maker to the mobile phone operators.

Re:There is some cost involved (0)

Anonymous Coward | more than 5 years ago | (#26249001)

Yes, certainly, store-and-forwarding 160 7-bit characters is a truly arduous task. Want to guess how much it costs to deliver this comment to you, which btw. is longer than 160 characters, via a couple dozen routers and a cluster of web and database servers, which not only deliver the message to you but also archive it and deliver it to thousands of other recipients on demand. Guess how much I paid to make that happen.

Greedy Bastards (1)

Farmer Pete (1350093) | more than 5 years ago | (#26248983)

I've known this for a long time now, but it still makes me hate the cell companies even more than I have in the past. It's things like this that make me want to trash my cell phone. I mean, it's easy to say you NEED a cell phone, but really, do you?

I went into a Verizon store last week to return a new phone I had gotten and the store tried to charge me a $35 restocking fee on the phone. I looked at their return policy and it said that I had to pay a restocking fee IF I was exchanging the phone, not if I was returning it. The sales guy called the manager and he starts reading the return policy a few times before he says..."Uh, yeah it looks like you don't have to pay the $35". The freaking manager of the store didn't know their return policy. WTF! I wonder how many people have (and will) paid the $35 when they didn't have to. Of course the reason I returned the phone was because Verizon has started FORCING you to subscribe to a data plan if you have a "smart phone". I didn't want to buy a phone for data usage over the air, I wanted one that I could use to check my email, skype, play games, etc over it's WiFi connection (most often when I'm out of the country). But no. You can't buy a smart phone from Verizon without paying at least $30 a month to them. Go figure. It was this treatment/policies that made me realize how much I don't want a cell phone...not by their rules anyways. If only there was a reasonable cell carrier in the USA.

I guess I should thank Verizon though. It was their shit policies and customer service (waiting 40 minutes in a line to return a phone) that made me ask my boss if I could port my cell number to my work phone (BlackBerry) and just use my work phone as my primary cell. When I found out the answer was yes, goodbye Verizon, goodbye cell bill, goodbye shitty contracts, and goodbye having two phones. Uhhhh I can feel the freedom already.

Another perspective - (0)

SixBanginFiveHangin (1400751) | more than 5 years ago | (#26249023)

When my girlfriend and I got together earlier this year, she was big into texting and got me into it. Since then, we've sent & received as much as 40,000 text messages a month combined. We each pay an extra $10 per month to enjoy this unlimited and unrestricted service, and I'd have to say it's been a key element in our relationship. 40,000 * 160 bytes = 6.4 MB. From what I read on Techdirt, it claims that communications between Hubble and Earth cost around $18/MB; in conclusion, I'd say the rates I pay for texting are actually a bargain. Granted - I could ge wrong somewhere in here, but from my math it seems that I'm not getting ripped off. If anyone can correct me, by all means go ahead so I can learn something. ^^^6^^^

Re:Another perspective - (2, Funny)

betterunixthanunix (980855) | more than 5 years ago | (#26249117)

"From what I read on Techdirt, it claims that communications between Hubble and Earth cost around $18/MB; in conclusion, I'd say the rates I pay for texting are actually a bargain."

Unless your girlfriend lives on the ISS, you are comparing apples to oranges.

Re:Another perspective - (1)

kindbud (90044) | more than 5 years ago | (#26249177)

From what I read on Techdirt, it claims that communications between Hubble and Earth cost around $18/MB; in conclusion, I'd say the rates I pay for texting are actually a bargain.

Yeah, but you girlfriend is clearly getting ripped off. I mean, look what's on the other end of the conversation.

Re:Another perspective - (0)

Anonymous Coward | more than 5 years ago | (#26249207)

40 000?
Assuming you sleep 8 hours per day, you're each either sending or receiving a message once every minute and a half that you're awake.

How do you get anything done?

Maybe they want to phase it out. (4, Insightful)

jcr (53032) | more than 5 years ago | (#26249029)

SMS is just a special case of very low-bandwidth data traffic, which should be superseded by email or jabber anyway.

-jcr

Subsidy (1)

midnighttoadstool (703941) | more than 5 years ago | (#26249031)

The carriers have to make money: texts are used to subsidise other services. If they aren't allowed to charge such a high fee then voice goes up. There are plenty in the UK who barely use voice, so the carriers must find ways of making money from them.

Unless one accepts a general principle against subsidy (which infact I personally do as it obscures, causes distortions and also bubbles) then this isn't an issue. For government to interfere, which is effectively what this article logically ends at, would be absurd since governments are subsidy addicts.

This Isn't News (1)

billsf (34378) | more than 5 years ago | (#26249063)

Of course I remember when SMS first appeared and it was not expected to make it. It as obvious a failure as "home shopping" but suckers are born every minute! Yes, its on the control channel and yes, it costs less for a text message as to 'ding' someones phone so they got your number -- that later is free to do , of course.

In these days when 1Mbit/s is pathetic and 10Mbit/10Mbit is more what you need and what that costs, it doesn't take too much imagination to conclude correctly that SMS costs less to GSM than ARP to Internet Protocol. Duh, duh, duh.....

BillSF

 

Want to get hosed? move to Canada eh. (1)

deviated_prevert (1146403) | more than 5 years ago | (#26249067)

Text is the biggest ripoff in Canadian telco history. The margins are nothing short of legalised extortion. The fact is that I cannot even send a simple net based e-mail to text a cell carrier unless I use a blackberry system. The cost of text communication to small business is ridiculous in Canada. If an independent company tries to get on the air and be innovative with services, the big three prevents them from entering the market with the help of the Canadian government.

frost pIst (-1, Redundant)

Anonymous Coward | more than 5 years ago | (#26249095)

tJo work I'm doing,

Competition? Never Happen! (2, Interesting)

reallocate (142797) | more than 5 years ago | (#26249111)

This makes me dream of the day when there is real competition in the wireless industry...

Keep dreaming. We won't see wireless competition because people don't really want it. What they want are cheap phones and phones that work anywhere. They get the latter as a result of market domination by a few corportions, and are willing to accept the hit on the former.

People like their toys and tools to be standardized. Look at the personal computer market. For everyone around here who rants about the evils of Microsoft, there are a dozen others who don't care because the dominance of Windows and one particular kind of hardware platform plays to their advantage.

The world is just one village.

I'm a fossil..... (0)

Anonymous Coward | more than 5 years ago | (#26249133)

I don't text and I don't accept text messages on my cell phone. I'm at a computer all day in my job, then again at night when I'm at home. I have voicemail for those times when I can't be reached by phone. If you have something to say to me that can't be said in person, by telephone, in an e-mail or via instant messenger, then maybe it doesn't need to be said. I can't think of an instance where texting is necessary so I don't use it. I guess I'm sticking it to the man by not playing into his scheme, huh? ;)

Yet another article not for nerds (1)

erroneus (253617) | more than 5 years ago | (#26249153)

I am all for this information being put out frequently until the general public "gets it." There are a few bits like this -- for example, how evil the RIAA is -- the general public STILL doesn't even know who or what the RIAA/MPAA/BSA are! And yes, the public needs to know when it is being raped and abused. These are some pretty important bits of information to be sure. But I fear we need a "For Dummies" version of this stuff and then get it mentioned on CNN or in Consumer Reports magazine or something the masses will get some exposure to. Obviously, this will not get on CNN or any major news channel for reasons that should be painfully obvious.

We have, at our disposal, some really large amounts of information, but we lack marketing skills. It needs to be formatted in a way people can read and understand it. It needs to be presented and offered in a way that people will look at it. Consumer Reports is pretty successful at this and perhaps it should be copied. I wonder if there are any geeks with husbands or wives that work in the needed fields that could be utilized to this end? Surely there are some geeks that actually do have some ability in those areas as well? We have all the data, we just need it formatted for consumption.

UK iPhone charges for texts, but gives free data (1)

daybot (911557) | more than 5 years ago | (#26249157)

The standard UK iPhone tariff includes 500 texts - after that they're about 20 cents (12p). But since it also includes pseudo-unlimited data, I can send as many emails as I like, complete with pictures. Most of my friends have iPhones too - so we send emails with pictures to each other all the time.

OMFG! (1)

ethicalBob (1023525) | more than 5 years ago | (#26249159)

OMFG y r thy so mean? :-(

Verizon charges txt rates for Mobile IM messages (1)

kindbud (90044) | more than 5 years ago | (#26249161)

How can they get away with that? I guess the other carriers do it too. IM is a free service offered by Yahoo, MSN and AOL and others. How does VZ get away with charging me to use a free service provided by a 3rd party? Why don't IM messages go over my data plan?

If I get a phone that runs Windows Mobile and install a IM client on that device, will it use the data service I'm paying for, or will Verizon somehow pipe those into their TXT network, too, and charge me extra to send "LOL" and ":)"?
 

There's infrastructure as well as bandwidth (1)

nicolaiplum (169077) | more than 5 years ago | (#26249241)

While it is true that SMS is carried in the control channel of GSM [1] and that control channel has reserved bandwidth not available for voice call channels, it is also true that heavy SMS traffic will saturate this control channel and that some carriers have had to increase the control channel bandwidth in order to make room for the volume of SMS. You can observe the control channel saturation (and resulting inability to set up new calls, while existing calls continue fine) in any major city in the UK from around 23:45 on 31 December to 00:30 on 1st January. So the carriers do have to put a bit more bandwidth into lots of SMS.
However there is also an SMS messaging centre to operate, which is a pile of computers to route messages, as well as storage on each cell base station for the SMS waiting to be transmitted to the handset - rather like email it's too cheap to meter, except for all those mail servers you need to forward and store the email.
The profit margin on SMS is clearly huge (consider that bulk SMS rates are at most half the cost of single SMS out-of-plan from a handset in the UK) but it's not 100% profit and 0% cost.

And finally, think about spam: the reason you don't get much SMS spam (compared to email) is that it costs quite a lot to send SMS compared to email. If you make SMS as cheap as email, you'll make it as spammy as email, and you need to think about how to avoid that.

[1] I'm going to ignore CDMA here, I wish the rest of the world would do the same.

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