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The True Cost of SMS Messages

kdawson posted more than 6 years ago | from the call-it-$24K-a-song dept.

Communications 583

nilbog writes "What's the actual cost of sending SMS messages? This article does the math and concludes that, for example, sending an amount of data that would cost $1 from your ISP would cost over $61 million if you were to send it over SMS. Why has the cost of bandwidth, infrastructure, and technology in general plummeted while the price of SMS messages have risen so egregiously? How can carriers continue to justify the high cost of their apparent super-premium data transmission?"

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Adam Smith sez... (5, Informative)

palegray.net (1195047) | more than 6 years ago | (#22218918)

How can carriers continue to justify the high cost of their apparent super-premium data transmission?
It's all about what the market will bear. Add in the fact that text messages are typically used for brief communication snippets and you have a more complete picture. Some providers offer unlimited texting plans... consumers are willing to pay for the convenience.

Next up on Slashdot: Why do cars cost so much?

Re:Adam Smith sez... (3, Interesting)

linzeal (197905) | more than 6 years ago | (#22218940)

I had an unlimited texting plan from when I used it for server messages at work. When I switched to my own plan with the same cell phone I just kept the unlimited texting thinking I would use it for something. I never did. The only texts I have on there are from 411 calls.

Re:Adam Smith sez... (5, Interesting)

jfim (1167051) | more than 6 years ago | (#22218972)

This might be a cultural thing. In regions where mass transit is more frequently employed, such as Japan, people almost exclusively use text messages. Since the US is more car-centric, it makes more sense to talk while driving instead of trying to type a text message.

Re:Adam Smith sez... (5, Funny)

palegray.net (1195047) | more than 6 years ago | (#22218988)

it makes more sense to talk while driving instead of trying to type a text message
Just curious, have you watched people drive recently? Maybe it's just Connecticut drivers...

Dumb kids. (2, Funny)

Jeremiah Cornelius (137) | more than 6 years ago | (#22219100)

Pay anything for instant gratification. :-)

Re:Adam Smith sez... (1)

odourpreventer (898853) | more than 6 years ago | (#22219316)

Many countries (in Europe at least) have banned talking while driving, even with headset. More are considering it.

Re:Adam Smith sez... (1, Interesting)

palegray.net (1195047) | more than 6 years ago | (#22219340)

On U.S. Naval installations, the only way to talk on your cellphone is if it has a bluetooth link to your car stereo. Traditional hands-free devices are not allowed. Anything else is a violation of federal law.

Re:Adam Smith sez... (2, Interesting)

Anonymous Coward | more than 6 years ago | (#22219380)

Yes it is a cultural thing, but it is not related to the level of mass transit deployment. In Japan, talking is considered a impolite practice and most of the commuters will mute the ringtone whenever they enter the train. Like Japan, Hong Kong has a high mobile network coverage and a sophisticated mass transit system, however citizens tends to talk loudly in the cab instead of typing messages.

Adam Smith sez...Hookers should be free. (0)

Anonymous Coward | more than 6 years ago | (#22219104)

"Next up on Slashdot: Why do cars cost so much?"

I'm still waiting for the reason why sex costs so much?

Re:Adam Smith sez...Hookers should be free. (5, Funny)

Jeremiah Cornelius (137) | more than 6 years ago | (#22219146)

I'm still waiting for the reason why sex costs so much?
Well, yer ugly, and you smell bad. Those are yer good points. Good lookin' blokes, what know how to talk with a bird, like what she's sayin', it's important like. We're the ones what get's it - and has 'em buyin' stuff fer us, too!

Bit a cologne... A blazer... Listenin' a bit more than talkin'. Goes a long way, mate. Sometimes into the next day!

Yer pal, Alfie.

Re:Adam Smith sez... (2, Funny)

BlackPignouf (1017012) | more than 6 years ago | (#22219138)

Why do cars cost so much?
Because we're even more addicted to car driving than we are to SMS sending?

Re:Adam Smith sez... (0, Offtopic)

snaptography (867263) | more than 6 years ago | (#22219140)

Mirror? Seems to be /.'d already. Cheers mate.

Article text in lieu of mirror. (5, Interesting)

palegray.net (1195047) | more than 6 years ago | (#22219226)

I just found out that AT&T (A-fee&fee?) is raising their text message pricing. When I first signed up for AT&T 6 or so years ago it cost 10 cents to send an SMS message, and it was free to receive them.

When AT&T switched to Cingular the price of sending a message dropped to 5 cents, but they started charging for incoming texts - also 5 cents. Assuming you send a message for every message you receive, this works out at about the same price as before.

AT&T came back online and phased out the CIngular brand name, and prices were again changed. This time to 15 cents each way.

More changes have taken place that I can't quite remember. At one point text messages were 10 cents either way, and at another point they even included MMS (multimedia messages) at the same price as SMS.

As of March SMS messages on AT&T will cost 20 cents and MMS will cost 30 cents - both to send a receive.

So let's do some math here, and figure out how much this simple transmission is actually costing us.

A standard SMS message contains up to 140 bytes (1120 bits) of data - this takes care of the 160 characters allowed in your text message. This might not make sense at first, until you realize that SMS uses 7 - not 8 - bit characters - leaving you with 128 possible character values instead of the normal 256. So 1120bits/7bits = 160 characters.

So our total message length is about a tenth of a kilobyte (.13671875 Kbytes). In terms that the iPod generation would understand - if you had an iPod with a tenth of a kilobyte you could fit 1/4000th of a song on it. I assume here and for the rest of this article that 1 song = 4 Megabytes.

If you divide 140 (the total number of bytes available to you) by 20 (the cost per message), you find that you are paying 1 cent for every 7 bytes of data. This leaves you with a cost of $1,497.97 for the 1024Kbytes contained in a single megabyte. iPod users: It would cost you $5,991.88 to transfer - not even to buy - a single song via SMS.

By comparison, I pay $50 a month for a soft bandwidth limit of 500 gigabytes through a local ISP. That comes out to 512,000 megabytes or 10,240 megabytes to the dollar. This allows me to transfer 2,560 songs for the same price as a Junior Bacon Cheeseburger off the value menu at Wendy's: $1. I will use this my standard measurement for the rest of this article.

So far I can make the following statements concerning the costs of bandwidth:

Cost to transfer 2560 songs:

From my ISP: $1
Via SMS messaging: $15,339,212.80

But wait, there's more!

When calculating SMS charges, most people don't take into consideration that the message is really being paid for twice! If I send a message to another AT&T user, I am paying to send it AND they're paying to receive it! This should probably be illegal, but that's for another discussion.

So how much does an SMS message actually cost? Not 20 cents - but 40 cents! This doubles all of my numbers above.

Furthermore, my above figures estimate that people actually use all 160 characters available to them. Say people on average actually only used half of that (which is still being generous) - then their price of data has again doubled from the numbers I gave above!

Making adjustments for both of the above statements, we realize that our above number isn't even close to correct! Corrected, the comparison looks more like this:

COSTS OF TRANSFERING 2,560 MP3s:

via my ISP: $1
via SMS: $61,356,851.20

Phew! THAT is premium data! It's no wonder that SMS texting alone is a 100 Billion dollar a year industry!

        How big is that? Take all of hollywood movie box office revenues worldwide. Add all of the global music industry revenues. And add all of videogaming revenues around the world. Even all those three together, we don't reach 100 billion.

Let's even go more premium - how much would it cost to hand deliver data?

The U.S. Postal service is currently charging 41 cents for this privilege (hmm.. only one cent more that AT&T charges to automatically handle an SMS message). So how much written data could we send in a letter?

Google says 250 is considered the standard words per page measurement, and a sheet of paper weighs about 4.5 grams. The U.S. postal service allows your letters to weigh up to 1 ounce before charging you more, which is just over 28 grams. So you could send 6 sheets of paper, minus 1 for the envelope. If you write on both sides that gives you 2500 words (10 pages x 250 words).

According to this page, the average english word is 5 characters long. Add in a space for every word and you have 6 characters per word or 1500 characters for page for a total of 15,000 characters.

Now we are not limited in any way in the types of characters we can use, but let's assume we are using a 256 character (8 bit) set.

Our letter therefore gives us ~14Kbytes for 41 cents. To transfer an MP3 using this method, we would be looking at about $119.95. To transfer 2,560 MP3s, that comes out to only $307,072. We would also need to take into consideration the bulk rate, but for the sake of argument (and because I don't feel like figuring it out), let's leave it where it's at.

The cost would drop dramatically if we compressed the data onto, say a DVD and our cost would be something more like $1.20.

Updating our chart from above:

COSTS OF TRANSFERING 2,560 MP3s:

TCP/IP: $1
TCP/SMS: $61,356,851.20
TCP/USPS: $307,072.00 (Bits written out on paper)

So getting a SMS delivered is bit for bit 200x more expensive than getting a message hand delivered to your doorstep anywhere in the United States.

What exactly justifies making SMS messages sixty one million times more expensive than ISP data and 200x more expensive than TCP/USPS? How come technology, communication, and infrastructure is getting cheaper while the costs of SMS messages are increasing exponentially? My theory: SMS messages are transfered over air made of solid gold.

Re:Article text in lieu of mirror. (1)

eiapoce (1049910) | more than 6 years ago | (#22219352)

Article text in lieu of mirror.
And this poses us the question: what's the marginal price of clicking on the link in the headline?

Re:Article text in lieu of mirror. (5, Insightful)

mathew7 (863867) | more than 6 years ago | (#22219432)

If you do the comparison, do it right:
With your ISP you have a direct medium (usually cable) capable of high-speeds (in this case, even 1mbps is high speed). And data overhead is less than 50% (IP header compared to 140 characters of data) on a pre-established link.
With your cell, you have a shared medium (air) with a limited number of frequency bands. The overhead is not only the extra data transfered, but also (like a phone conversation) it has a separate line negociated to transfer.
If you would have smaller prices on SMS (let's say 10 times smaller), more and more users would use it. This would increase the providers load, and even if they could handle it, some cells could be limited by their bandwidth which is regulated by the FCC. This would increase the transmission times and even affect regular communications, which means more angry calls to tech support.

So providers probably justify it as a "crowd control" (something like use it only if you really have to).

Im Romania at least one of the ISPs had a 1st 3 seconds not charged. Needless to say, the consumers started making 1-word calls (call, say 1 word and hang up, then do the same for each other word). I've heard about 1000-page detailed phone bills which were less than 10$. After the 1st year, they cancelled it on ALL contracts, not just the new ones. I don't have to say how it was during phone "rush hour" when you wanted to make a regular call.

Re:Invisible Thuggery (0, Offtopic)

sethstorm (512897) | more than 6 years ago | (#22219164)

It does not change the fact that it is still a force (and one that uses "tyranny of the majority" at that) that has a "null" attack surface (no real place to attack unless you don't mind taking on the majority). That's where the humanity of it stops, and the imperfections have become justifications for normally inhumane actions(just because the "minority" is perceived as "silver spoon elitist", "Marxist", "undeserving", and/or "thuggish" if they present an objection).

I doubt that's covered in any of that (over quoted) person's works in that respect.

Re:Invisible Thuggery (1)

palegray.net (1195047) | more than 6 years ago | (#22219208)

That's where the humanity of it stops ...
I get your point, but I make the assertion that given human nature, that's actually where the humanity of it begins.

Re:Adam Smith sez... (0)

Anonymous Coward | more than 6 years ago | (#22219228)

Adam smith was a plagarising baffoon, over fifty years behind the times when he published his wealth of nations. He was lauded by the public and more importantly the government because he told them what they wanted to hear, he was pro-central banks and inflation. His childish understanding of pricing lent itself to the support of communism, he couldn't reconcile why a diamond was worth more in exchange than water and how the price of goods was determined - a question answered in the 15th century - and still not taught/understood by modern economics because it highlights the futility and inherent injustice of central government and undermines "modern" econometrics attempts to appear scientfic.

Re:Adam Smith sez... (1)

palegray.net (1195047) | more than 6 years ago | (#22219256)

Posts like yours are so much better when they (1) aren't posted under AC, and (2) quote sources. This is the Internet... HTML documents are, by nature, supposed to contain hyperlinks.

How can they justify the cost? (5, Insightful)

rritterson (588983) | more than 6 years ago | (#22218920)

They can justify the cost because we continue to reward them with lots of our dollars.

Re:How can they justify the cost? (1)

dotancohen (1015143) | more than 6 years ago | (#22219094)

They can justify the cost because we continue to reward them with lots of our dollars.
And because to lower the price would be to have low-price SMS compete with high-priced voice calls.

Offer and demand (1)

jfim (1167051) | more than 6 years ago | (#22218928)

Because it's what the market is ready to pay for. If nobody wanted to pay that much for SMS service, you can be sure they would lower its price.

Re:Offer and demand (4, Informative)

dvice_null (981029) | more than 6 years ago | (#22219022)

There is probably some air on the prices, but not as much as the author of the article makes you think. Development, maintenance and hardware costs must be covered (service providers don't get the system for free). Then there is support you need to provide for customers. And billing. And marketing consumes some money also. And obviously managers need to get paid.

And have you ever wondered how is it possible that simple text messages can jam the system every New Year? Sending 10 byte sms 1000000 times isn't equal to sending 10x1000000 bytes of data using data transfer. Every time you send an sms, the system needs to open a connection and it consumes a lot more resources.

A LOT of air on the prices (5, Informative)

Dr. Hok (702268) | more than 6 years ago | (#22219206)

There is probably some air on the prices, but not as much as the author of the article makes you think.
I work in a SW company and once talked to a representative of a GSM provider over the lunch in a pause of a workshop. He told me (and he didn't tell me it's a trade secret) that the entire SMS messaging in their network was handled by one single Sun workstation.

IIRC it had cost about a million Euro (most of which was the price of SW) and just sits there, generating a revenue of roughly a million Euro per day. Maintenance costs: almost zero. Network load: almost zero, because messages are transmitted only in pauses between calls. Modulo New Year, nationwide televoting or football world cup, of course, where the assumption of a few messages between a few calls is no longer valid.

Re:A LOT of air on the prices (1)

palegray.net (1195047) | more than 6 years ago | (#22219272)

If the parent post is true, it's an almost heartbreakingly beautiful example of turning a profit from a relatively miniscule investment. Wow.

Re:A LOT of air on the prices (3, Interesting)

cnettel (836611) | more than 6 years ago | (#22219398)

Yep, assuming that you have a cell grid covering the better part of a geographic area. A phone that's just turned on with a user who expects coverage wherever he goes costs almost as much as one with a limited, but regular, usage of SMS and voice. Still, the first one can get off far cheaper than the second, simply because users seem more willing to accept paying for actual actions, than just waiting. The interesting aspect in this light is that the text message might very well transfer as much information as a phone call of equivalent cost. The fact that the data content is far smaller is simply due to the ingenious idea of letting the user do the compression.

Re:Offer and demand (1)

eulernet (1132389) | more than 6 years ago | (#22219216)

It's so true.

My previous company had to fix the performances of a big french operator.
Their SMS system was buggy and slow as hell.
If I remember correctly, it's always slow, with a limit of 100,000 messages per hour.
This also explain why in Taiwan, new year's messages arrive with a delay of several hours.

Air interface bottleneck plus infrastructure costs (4, Informative)

Swordfish (86310) | more than 6 years ago | (#22219246)

You've got it right there.
The reason that the real cost is actually quite high is the fact that the GSM air interface is miniscule compared to the demands of the all the people using the system in each cell.
If an SMS were free, the air interface would get clogged up.
So it's quite sensible to economize the use of the interface using price to depress demand.
From memory (from my work with Detecon/D-1 in Bonn, Germany) in 1991/92, the SMS data goes over something called an SDCCH channel, which uses 1/8 of the bandwidth of a normal 13 kbit/sec voice channel (or half-rate 6.5 kbit/sec). The SDCCH channel is devoted to one user for a few seconds during the transaction. Potentially you can have 64 SDCCH channels open on a single physical frequency (using TDMA) at one time. But there are also bottlenecks in the signalling system (control channels).

Additionally you require the whole infrastructure for storing and delivering the SMSes. Store-and-forward has complexities that connection-oriented traffic does not.

Re:Offer and demand (1)

remmelt (837671) | more than 6 years ago | (#22219312)

NYE? Perhaps that is because people use their cellphones to call other people up as well? You know, to wish them a happy new year? It happens.

Re:Offer and demand (3, Insightful)

nmg196 (184961) | more than 6 years ago | (#22219330)

> Development, maintenance and hardware costs must be
> covered (service providers don't get the system for free).
> Then there is support you need to provide for customers. And billing.

The infrastructure is exactly the same as that used for voice calls.
In building the voice network, they DO get the SMS facility for free (or very nearly so).

There is pretty much no reason why SMS and for that matter, data charges are so high. Even if they only charged quarter of what they do now for texts, they would still make a healthy profit on each one. People would probably also write more often and not stick to the 160 character message size so much so they might make a similar amount of money anyway.

It's easy... (5, Insightful)

Sique (173459) | more than 6 years ago | (#22218948)

SMS is the byproduct of the GSM standard. It was never designed to actually be a customer product. It was more or less thought to be some stderr of sort.

When SMS was introduced at the beginning of the 90ies in Europe, it was basicly free. There were SMS gateways all over the Internet. But then the carriers were recognizing the marketing potential of SMS, and slowly the prices per single message were rising until they reached 49 ct (in Germany at the end of the 90ies). Only when parents were stunned by the SMS cost of their children, protests started to mount, and then the diverse regulation offices in the different countries were trying to limit SMS prices, so there were actual plans which included for example 1000 short messages per month.

SMS is a prime example for the difference between price and cost of a product. The cost is nearly zero, but the pricing is expensive.

Re:It's easy... (1)

Carthag (643047) | more than 6 years ago | (#22219030)

What's scary are those 5000 "free" SMSes per month deals. I write about 2000 per year (1000 from May 1 to Dec 1) and I don't even worry about sending SMSes, I just send them whenever I feel like it. Costs me about 70 bucks per year in SMS alone, whereas the 5000 "free" offer would run up 700.

Now, there are minutes included as well, but that still doesn't begin to compare.

Re:It's easy... (1)

Colin Smith (2679) | more than 6 years ago | (#22219170)

The cost is nearly zero
Right. Because huge world wide telecommunication networks just sprang into existence fully formed from nothing.

 

Re:It's easy... (5, Informative)

Sique (173459) | more than 6 years ago | (#22219262)

What about actually reading the posting you are replying to?

I never said that GSM cost is zero. I said that the cost of SMS within GSM is zero, because SMS is just a part of GSM (its stderr channel). So if you deploy a huge GSM network to work as a provider of mobile voice services, you get the SMS service for free. When GSM first was deployed it was never thought to have SMS as a separate service. Thus the first huge SMS networks were paid for by voice users who weren't even using SMS. Then the providers which already had a complete SMS infrastructure in place saw that the usage of SMS started to grow and they could just print money by increasing the SMS prices.

When GSM was introduced in the U.S., the SMS facility was already been known to the providers as a big cash cow, and the calculations were already taking that in account.

But still the cost to send an short message is much lower than the cost to send a phone conversation with about the same price. Here in Austria the charge for 1 min of mobile phone conversation is often 1 ct (up to 5 ct/min for prepaid plans). So for the cost of a single short message (19 ct) I can have a conversation for about 19 minutes. Which one will be more expensive to transmit for the provider?

Moderation (1)

wall0159 (881759) | more than 6 years ago | (#22219224)

Why the hell was the parent moderated "troll"? Are there phone-company lackeys disguised as libertarians here?

Re:Moderation (1)

palegray.net (1195047) | more than 6 years ago | (#22219378)

Why draw a distinction? If Steve Ballmer stands up and says "the sky is blue" he's make an accurate statement, regardless of what this community might think of his other views and actions.

Re:It's easy... (2, Interesting)

JonathanR (852748) | more than 6 years ago | (#22219418)

You should also add that prior to GPRS being implemented, that the ability to send data from handset to handset was by using the network control protocols*, rather than within voice packets. Of course the GSM system wasn't designed to send masses of data by this method, so as far as the network infrastructure is concerned, high volumes of SMS data is a much greater burden than the packet data sent during a voice call.

*This is my non-techie understanding. Somebody with GSM background can elaborate with the correct jargon.

Doh (1)

wildBoar (181352) | more than 6 years ago | (#22218952)

cos telecom companies are a bunch of robbing bastards, and people are stupid enough to keep paying.

For a long long time now a single text message has been priced at the same level (or thereabouts) as a 1 minute phone call, cosnidering the data in a text is off in less than a second as opposed to the 60 seconds of data in the equivalent phone call...

Re:Doh (1)

palegray.net (1195047) | more than 6 years ago | (#22218976)

Since your objection seems to stem from people's (apparently stupid, by your measure) willingness to trade currency for a service at a certain price point, may I assume you consider everyone who participates in a capitalist society to be a robbing bastard? Or is it that you personally get to set the standard for what "reasonable profit" is?

Re:Doh (1)

ozmanjusri (601766) | more than 6 years ago | (#22219072)

Or is it that you personally get to set the standard for what "reasonable profit" is?

Anyone who's been involved in putting together a tender will tell you that "reasonable profit" is a well understood term, and on most cost plus jobs will be 15%.

Re:Doh (2, Insightful)

palegray.net (1195047) | more than 6 years ago | (#22219118)

Score one for you on the textbook definition of reasonable profit in a professional service provider sense (i.e. an engineer or architect). Now try this: How about incorporating loss leading products and services, multinational issues, public trading levels, etc into an overall picture of profitable operations, from the start of the telecom supply chain to the handset that's chirping in the customer's hand?

Do you personally know people who do in-depth cost analysis calculations on the profitability of their web hosting provider before forking over their cash? Seems like a big waste of time to me; most people seem to primarily care about the reliability and long-term track record of the company. Look at what the market as a whole is willing to pay, and compare that with your personal cost in time and money to use the service to arrive at a decision.

As the four other posters... (1)

tommyhj (944468) | more than 6 years ago | (#22218962)

What we want to pay is what the price will be, end of story... On a sidenote: everyone with a cellphone should get together and ban the use of SMS untill the carriers lowered prices to at least 1/10. But that's never gonna happen. I wonder what SMS/MMS will cost in 10 years? :-)

Re:As the four other posters... (1)

palegray.net (1195047) | more than 6 years ago | (#22219014)

Here's what we do. Set up a website that allows people to register and receive an automatic text message reminder not to use text messaging. We'll get those rascally telecoms yet!

Re:As the four other posters... (1)

riseoftheindividual (1214958) | more than 6 years ago | (#22219046)

I've always refused to reply to text messages on my phone. Not only because of the cost, but because I think it's asinine to send me a text message on my phone. If I wanted to read text, I'd check my email. And other than having an automated system send you a message, I see no practical use for it. It's even more dangerous to be reading text messages while driving(or anything other than sitting down), and it's not as convenient as simply leaving a voice message.

I'm sure if I was in environments where I needed more covert communication I would feel differently, but as it is, I just don't get why people are willing to pay so much for it.

Re:As the four other posters... (1)

palegray.net (1195047) | more than 6 years ago | (#22219068)

I just don't get why people are willing to pay so much for it.
The same reason a lot of people prefer to send an email instead of picking up the phone. It's not hard to figure out.

Re:As the four other posters... (0)

Anonymous Coward | more than 6 years ago | (#22219188)

Not everyone lives under the delusion that everything should be free just because they want it to be.

Re:As the four other posters... (0)

Anonymous Coward | more than 6 years ago | (#22219362)

>Not everyone lives under the delusion that everything should be free just because they want it to be.

You must be new here.

Re:As the four other posters... (1)

palegray.net (1195047) | more than 6 years ago | (#22219406)

You must be new here.
No way dude, that Anonymous Coward guy has been posting to /. for years!

Re:As the four other posters... (1)

totally bogus dude (1040246) | more than 6 years ago | (#22219190)

I usually find voicemail much less convenient, at least to receive it. Partly this is the interface; I get notified that someone's left a message via an SMS. So first I need to read the SMS to see I have a voice message. Then I need to call up my voice mail service and listen to the robot woman tell me when the call was missed (which I usually already know because my phone previously notified me that I missed a call). Then I have to listen to the message, and if there's anything important in it I normally need to listen to it again so I can write stuff down (assuming I'm at a location where I can write). And if there's a phone number or it's not clear enough I may have to listen to it several times before I can fairly sure I've transcribed it correctly.

Compared to an SMS, it's a lot more hassle. Although you sometimes have to deal with strange abbreviations, most important details (phone numbers, addresses, names) will be written in full and with no ambiguity.

Also, if the message is worth keeping around for a while "just in case", voice mail provides a much more cumbersome interface than an SMS mailbox. "Visual voicemail" and similar would help with that aspect though.

Re:As the four other posters... (1)

esper (11644) | more than 6 years ago | (#22219358)

Sounds like your main problem is that your voicemail interface sucks. When I get voicemail, my phone displays "You have 1 new voicemail message." and sets the soft buttons to 'ignore' and 'voicemail' until I acknowledge it. After the one-touch dial to check voicemail, it sends me straight into the voicemail system (no need to enter a PIN by default when calling from the number the mailbox is attached to) and greets me with "You have one new message. First message:", then plays it back. If there's a phone number, I may listen to it a second time to copy that down, or I may just ignore it and take advantage of the post-message menu's "press 8 to return call" option.

No intermediate SMS messages, no telling me what time the message was left (unless I ask for it - I think there's an option in the post-message menu for that, but I've never wanted to use it, so I'm not sure), none of the headaches inflicted by your voicemail system... On the contrary, my phone/service makes it much more of a hassle to get into a text message and then delete it afterwards than the "one button to call voicemail, one button to delete message" interface I've got for voice messages.

Re:As the four other posters... (4, Funny)

esper (11644) | more than 6 years ago | (#22219294)

It's even more dangerous to be reading text messages while driving(or anything other than sitting down),

Some of us like to live dangerously. On the rare occasions when I get text messages, I read them standing up.

Re:As the four other posters... (1)

teh kurisu (701097) | more than 6 years ago | (#22219360)

In noisy environments, or when someone is hard of hearing, SMS is far superior to a voice call. Email could be as good, but just isn't as ubiquitous (usage-wise) on mobile phones.

I've always found voicemail systems frustrating, slow and costly. Many mobile packages charge you for receiving voicemail, whereas (outside the US at least) receiving an SMS is free, so it's a little impolite to leave a voice message as opposed to an SMS. The 'while driving' argument is also out if you live anywhere that bans mobile phone use while driving, because even if you're using a bluetooth headset, the ban includes pressing buttons on the device.

How can you justify still using SMS? (5, Informative)

Misanthrope (49269) | more than 6 years ago | (#22218964)

Just use
T-Mobile: phonenumber@tmomail.net
Virgin Mobile: phonenumber@vmobl.com
Cingular: phonenumber@cingularme.com
Sprint: phonenumber@messaging.sprintpcs.com
Verizon: phonenumber@vtext.com
Nextel: phonenumber@messaging.nextel.com

Just buy the cheapest data-plan and it's still better if you're a heavy user.

Re:How can you justify still using SMS? (5, Informative)

Darkforge (28199) | more than 6 years ago | (#22219000)

All of the US cellular providers charge not just per message sent, but per message received. Using an SMS e-mail gateway may save you sending fees, but it won't save you on the receiving cost.

Re:How can you justify still using SMS? (1)

palegray.net (1195047) | more than 6 years ago | (#22219032)

not just per message sent, but per message received
One might even say they're getting it from both ends. But that would sound kinda naughty...

Re:How can you justify still using SMS? (2, Insightful)

Bert64 (520050) | more than 6 years ago | (#22219204)

So you're saying that by spamming those email to sms gateways, the victims will actually have to pay to receive those spams? That's a system just asking to be abused.

Re:How can you justify still using SMS? (1)

rilak (1099845) | more than 6 years ago | (#22219028)

Because in some places, SMS is free (or virtually free).
My plan is (converted to US currency) 3 dollars/month + 0.7 cent/SMS. No free minutes, free received SMS.

Re:How can you justify still using SMS? (1)

argiedot (1035754) | more than 6 years ago | (#22219092)

Fascinating, where do you live? Mine is 5 USD / month + 0.12 cents / SMS. I get 1.1 USD worth of credit for that much, after which I need to buy more. Calls are 2 cents a minute and if I pay an extra dollar, I can make calls at half a cent to numbers on my provider and 1.2 cents to numbers on another provider and I get 100 free SMS per day with 0.24 cents / SMS above that. I'm in India. Actually, I thought it was pretty bad the way it was, but converting makes it look so much better.

Re:How can you justify still using SMS? (1)

Corporate Troll (537873) | more than 6 years ago | (#22219168)

Here 0$/month, 0.13 cent/SMS, 0.13 cent/minute (anytime in the day, to anywhere within the country including other cellphones). Sending MMS is more expensive (0.57 cent/MMS), but I haven't done that yet. (Currencies converted with Google at todays rates [google.com] )

My phone bills rarely exceed 20€/month and that's for my and my wifes phone.

Re:How can you justify still using SMS? (1)

KDR_11k (778916) | more than 6 years ago | (#22219374)

So you have to send 6 SMS to pay 1 cent? In Euros you'd have to send even more... Guess with those prices I could use it for a whole year on one Euro or less...

achilies heel of the iPhone (1)

SethJohnson (112166) | more than 6 years ago | (#22219110)

This little workaround is exactly why Apple is preventing 3rd-party apps on the iPhone. They're undoubtedly under a strict contract with AT&T not to allow anything on the iPhone that circumvents AT&T's profit centers. That would be VOIP and an SMS app that did all the sending via email. Hey, I've had my iPhone for 2 weeks and I love the crap out of it. I'm just a slight bit frustrated by this compromise. Wish it were a full-on computing platform.

Seth

Re:achilies heel of the iPhone (1)

adpowers (153922) | more than 6 years ago | (#22219442)

Have you not heard? The SDK is coming out February. Of course, we don't know any details about it yet, so maybe you'll have to get your app approved by Apple and ATT, which would really blow. I'm kinda wondering if you'll have to shell out for the SDK and then buy apps through the iTunes store, which would again suck. Either way, apps are coming.

Re:How can you justify still using SMS? (2, Informative)

Osty (16825) | more than 6 years ago | (#22219134)

Just use <phone number>@<provider gateway>

While that's useful to know, you have to know what provider your contacts are using rather than just knowing their phone number. If your friends change providers (this happens more than you'd expect, especially since number portability became possible a few years back), you have to keep track of that. Even then, when the message sent through the gateway always comes from the same phone number. Depending on how your phone shows incoming messages, it may not be clear who the message is from. It's impossible to directly call the person sending you a message through the gateway (you'll have to dig through your contacts to find the person with the associated name/email address in the SMS body), which at least for me is an important feature to have.

At least for me, SMS is used exactly as it sounds -- short messages, not long conversations, usually along the lines of "Let's meet up <somewhere>" with a short acknowledgement sent in reply (if at all). An average SMS session for me consists of 2-6 messages, depending on whether or not several replies are needed. Anything more than that and I'd rather send an email or physically call the person. I realize that I'm probably not a typical SMS user, but even so I'd much rather have cheap SMS available than always going through an email-to-SMS gateway.

insane (0)

Anonymous Coward | more than 6 years ago | (#22218970)

reeeeeediculous

Capitolism (1)

Smordnys s'regrepsA (1160895) | more than 6 years ago | (#22218978)

How can carriers continue to justify the high cost of their apparent super-premium data transmission?

Uh... what part of "supply and demand" did you not understand?

meh (3, Insightful)

reynaert (264437) | more than 6 years ago | (#22218982)

They've invested a crazy amount of money in technologies customer's don't care for (3G, all the different ways to get the Web on phones), so now they have to charge a lot for the two things people actually use (SMS and ringtones).

Re:meh (3, Insightful)

mikkelm (1000451) | more than 6 years ago | (#22219016)

Consumers don't care about 3G? I'm extremely satisfied with my HSDPA USB modem, and everyone I know to have 3G phones are happy with their service.

Re:meh (0)

Anonymous Coward | more than 6 years ago | (#22219326)

3G? We still don't have 3G in this country.

um... hello? (0, Offtopic)

nebaz (453974) | more than 6 years ago | (#22218984)

SMS = Serious Money, Suckers.
SMS = Sixty Million per Syllable
SMS = Send Mail, Son
SMS = Sans Mon Sens
SMS = Sizable Monetary Subtraction
SMS = a literal phrase which if sent through it's namesake would bankrupt Donald Trump

They don't have to justify anything. (1, Insightful)

Ihlosi (895663) | more than 6 years ago | (#22218992)

How can carriers continue to justify the high cost of their apparent super-premium data transmission?



It's a market economy with lots of morons as customers. As long as they find enough morons to pay their super-inflated prices, they don't have to justify anything. And if they don't find them, they just have to justify why they're not making profit in front of their shareholders.


I've quit sending text messages years ago.

Re:They don't have to justify anything. (2, Insightful)

palegray.net (1195047) | more than 6 years ago | (#22219050)

The fact that people use text messaging services doesn't exactly make them morons. You could just as easily say that using the phone for voice comms makes you a moron. It's all about the level of service and convenience you want.

Let me put things a different way: When I pay a buddy to help me fix my car, that doesn't make me a moron. I set a price for his assistance, and he agrees to it. Could I learn how to fix my car myself? Sure. That would be a major time investment, though, and I'm willing to trade currency for time in this case. So it goes with every other product and service we buy in a capitalist society.

Re:They don't have to justify anything. (1, Insightful)

Ihlosi (895663) | more than 6 years ago | (#22219298)

The fact that people use text messaging services doesn't exactly make them morons.



The fact that people apparently send hundreds or thousands of text messages per month, at completely ridiculous prices, with an information content close to that of white noise, hints at them being morons. Or just bad at adding up numbers.



When I pay a buddy to help me fix my car, that doesn't make me a moron.



However, when you pay your buddy more to fix your car than a completely new car would cost at the dealership down the street, then you're either really irrationally in love with your car ... or a moron.


simple, my dear watson (0)

Anonymous Coward | more than 6 years ago | (#22218994)

> How can carriers continue to justify the high cost of their apparent super-premium data transmission?

Because people keep paying them the fee they ask for the service. Price competition has occurred for general cell phone service, because everyone who buys in, uses it. The majority of the users probably don't use SMS and don't really care about it; those that do, either don't have a grasp on how much money they're spending or don't care.

Bottom line: when people stop using the service because it's too expensive or start changing carriers for lower SMS transmission prices, you'll get price competition.

That's what happens without net neutrality (5, Insightful)

Animats (122034) | more than 6 years ago | (#22219006)

Cellular air links don't have "net neutrality". The pricing for voice, web browsing, SMS, video, and non-Web data connections is totally different. That's what it's like without net neutrality.

Re:That's what happens without net neutrality (1, Insightful)

Colin Smith (2679) | more than 6 years ago | (#22219180)

Yes. And...

 

That's what happens without engineering constraint (0)

Anonymous Coward | more than 6 years ago | (#22219252)

And that's like saying that just becausee it's ones and zeros you should be able to run Intel code on PowerPCs. Video, voice, and other data have different requirements they have to meet to ensure customer satisfaction. Your argument is an example of simplifying too much and ignoring others.

What are the American Telcos smoking (1)

MoHaG (1002926) | more than 6 years ago | (#22219036)

I'm shocked at the price of SMS messages in the US.

Here in South Africa a typical SMS costs at most R0,80 (About US$0,10) and no network charge for incoming SMS messages. (I can just see how spamming someone with e-mail / web originating SMS messages can drive their phone bill to insane amount with no control over it) You can even get SMS prices as low as R0,25 (~US$0,04) if you go for a bundle.

Re:What are the American Telcos smoking (2, Insightful)

dido (9125) | more than 6 years ago | (#22219174)

In the Philippines, widely considered the SMS capital of the world, where the three major carriers among themselves handle over a billion messages a day, prices have always been relatively low as well. They have generally been, for as long as I can remember, priced at PhP 1, which is about 2.5 US cents at current exchange rates, also with no charge for incoming messages. The basic rates go even lower when you factor in things like the carriers giving you a certain number of free SMS per month for monthly plans and per prepaid load, unlimited text messaging for a day for a fixed rate deals and other similar things. And even at these rates it can't be said that the carriers are losing money. In fact, they're making scads of it.

Even more rediculous.. (4, Insightful)

DigitAl56K (805623) | more than 6 years ago | (#22219038)

Having to pay to send and receive SMS.

Imagine if the postal service did that: I have to pay to mail you a letter, and then you have to pay to receive it. Better yet, you have no choice but to receive it and the postal service will bill you for it. Imagine all that spam you get in your mailbox costing 10c each. This is how SMS is charged on most US carriers.

With the ludicrous fees associated with SMS (dollars per byte), if I pay several cents for a 160 character message it ought to get delivered without charges on the other end (including that persons bundled SMS "allowance").

Justification (1, Troll)

Mike1024 (184871) | more than 6 years ago | (#22219048)

How can carriers continue to justify the high cost of their apparent super-premium data transmission?"


How can Microsoft justify the high-cost of vista premium when all you get is a DVD that cost less than $0.25 to produce?

How can phone companies charge more for international telephone calls than they do for international data transmission, like Skype, which transmits the same audio?

How can Apple justify factory macbook upgrades which cost more than doing the same upgrades yourself?

How can air lines and train companies justify changing ticket prices for the same service closer to departure, when the cost of providing the service remains the same?

How can Intel make a bunch of Core 2 chips then justify charging a premium for the ones that remain stable at higher clock rates, when both fast and slow chips cost the same amount to make?

The answer is: The companies can charge what they like for products, the cost of production doesn't have to factor into the price at all. Companies like to maximise profits, therefore they set their prices at a point where they will make the most profit - which usually means high enough to make a good profit per item, but low enough not to drive customers to competitors.

Re:Justification (1)

JasterBobaMereel (1102861) | more than 6 years ago | (#22219280)

How can Microsoft justify the high-cost of vista premium when all you get is a DVD that cost less than $0.25 to produce?
- Because it actually cost Microsoft money to make the contents of that DVD

How can phone companies charge more for international telephone calls than they do for international data transmission, like Skype, which transmits the same audio?
- Because it cost them money to use the international trunks/satellite links

How can Apple justify factory macbook upgrades which cost more than doing the same upgrades yourself?
- Because they have to pay someone to do the updates + carriage

How can Intel make a bunch of Core 2 chips then justify charging a premium for the ones that remain stable at higher clock rates, when both fast and slow chips cost the same amount to make?
- They don't cost the same to make?

How can carriers continue to justify the high cost of their apparent super-premium data transmission?
- They can't since SMS traffic is essentially free....

Re:Justification (1)

Bert64 (520050) | more than 6 years ago | (#22219364)

How can carriers continue to justify the high cost of their apparent super-premium data transmission?"

How can Microsoft justify the high-cost of vista premium when all you get is a DVD that cost less than $0.25 to produce?
They can't, which is why a large number of users run pirated copies, and an increasing number are looking towards free alternatives like linux.

How can phone companies charge more for international telephone calls than they do for international data transmission, like Skype, which transmits the same audio?
They can't, people who know about the cheaper alternatives tend to use them, i haven't made an international call direct from my phone for years.

How can Apple justify factory macbook upgrades which cost more than doing the same upgrades yourself?
They don't, very few people buy bare upgrades direct from apple, some buy them from an apple store because they perform the physical installation, and some people buy new machines with upgrades already installed for the same reason. And as was stated recently regarding the flash drive for the macbook air, apple's upgrade options aren't a massive markup.

How can air lines and train companies justify changing ticket prices for the same service closer to departure, when the cost of providing the service remains the same?
Ticket prices go up closer to departure, because knowing passenger volume in advance does make the service cheaper... Many airlines will allocate a smaller aircraft if there are less passengers, they have to provide less in-flight food, and less cabin crew. Cheap last minute deals are usually due to cancellations, where they have already made some money from the cancellation fee, and have already reserved the necessary resources to carry them.

How can Intel make a bunch of Core 2 chips then justify charging a premium for the ones that remain stable at higher clock rates, when both fast and slow chips cost the same amount to make?
Because the ones which don't remain stable are clearly inferior, and if they cost the same as the better ones then noone would ever buy them, leaving intel with a huge stack of unsellable inferior cpus.

The answer is: The companies can charge what they like for products, the cost of production doesn't have to factor into the price at all. Companies like to maximise profits, therefore they set their prices at a point where they will make the most profit - which usually means high enough to make a good profit per item, but low enough not to drive customers to competitors.
Unfortunately true, there really should be a defined reasonable profit level, which companies are not allowed to go above. This will also discourage dumping, because it will be harder to use a successful product to gain a foothold for a poor one.

Value != cost (1)

oxygen_deprived (1127583) | more than 6 years ago | (#22219060)

People pay for something for its value, not its cost.
So how much did it cost Da Vinci to paint Mona Lisa ? A canvas + an easel + a model + brushes + paint.So what justifies the millions And the carriers dont need to justify anything.If you dont see any value in SMS given the prices, use alternate methods. email/fax whatever. That people are willing to pay is the very reason they are paying.

Bling and Spinning Tires (3, Interesting)

EdIII (1114411) | more than 6 years ago | (#22219122)

Idiots. I remember somebody saying there was a "sucker born every minute". Some people just have no clue what they are spending when they cannot see a price tag or look someone in the face when that person asks them 1$. They just don't think about the big picture, what their bill is at the end of the month, and what they are getting for their money. I have a mentally challenged friend, which I love to death. I take care of him as much as I can. I actually pay some of his bills for him. He cannot handle the money. He can do basic math and figure out that the drink costs 2.50$, and he can pay for it and makes sure he gets the right change. He CANNOT figure out how many drinks he can afford on his paycheck. I don't want to sound condescending, but I am not sure most of the people getting stuck with high SMS charges are that much smarter than he is.

I always knew SMS was a scam. 160 characters per message and I was getting 25 gratis? WTF? Were they communicating these messages with 300 baud modems over phone lines? I was instantly aware there was an extreme difference in the actual overhead of sending the message and the price point being set for the market. I did not understand the technology that much, but nobody could make me believe the cost of broadcasting a small message was that high. They do OTA programming all the time. The signal cannot take that much of the bandwidth on the cell tower. It would have to be equivalent to a 1 second conversation maximum, and since it is more like a UDP packet than a TCP packet, there would be less communications "overhead" to send it. Maybe I am wrong, I don't know if a cellphone sends an ACK type packet when it receives an SMS. Anyways, the technical aspect of it could not make me believe it cost that much.

What made it far far worse as well was that early on, some systems like Exchange Server would use SMS as part of their delivery system. Try getting nailed for an SMS message for every 15 minutes for the whole day. Wheeeee. The SMS cost alone made enterprise email exchange on smartphones or pda phones cost prohibitive. Hence part of the real reason why that technology has moved to Direct Push and uses the WAP gateways instead. The other reason, IMO, is that Direct Push does not depend if your on the phone or not. You spend 30 minutes on your phone without it and email/contact/task synchronization stops during that time period.

Please DON'T get me started on SMS messages that cost the person 1$ just to send them. American Idol? Deal or No Deal? Mofo Puhleeeze. The sheeples wonder why they are being charged 45$ at the end of the month in just extra charges.

So that's what it really boils down too, sheer idiocy on the part of a lot of consumers... and many of them tend to be of the younger "hipper" generation that coincidentally does not pay their bills.

In any case, its all over now. Verizon has started offering unlimited texting plans with all types of messages included, not just SMS. Included gratis in just about any voice plan. Recently switched 6 lines over to it and saved 30$ doing it. So if Verizon is doing it, and they are the WORST at plans, then everybody else must be doing it already.

Re:Bling and Spinning Tires (1)

ArsenneLupin (766289) | more than 6 years ago | (#22219404)

Maybe I am wrong, I don't know if a cellphone sends an ACK type packet when it receives an SMS.
I'm no expert on this either, but IMHO, they'd pretty much have to have some kind of ACK, or you'd lose SMS'es not only on New Year's day but all year round.

I call shenangians (2, Interesting)

Peter Cooper (660482) | more than 6 years ago | (#22219130)

Admittedly, I can only see the summary because the site has been Slashdotted, but it seems to imply that $61m of SMSes cost about $1 to actually deliver.

Given that people in the UK send, in total, about 50 billion SMS per year, and pay approximately 12 cents per message (we'll forget the freebies, let's go really conservative to see how silly the summary of the article is), for about a total market of $6bn. So, if $61m of charged SMSes cost $1 to deliver.. $6bn / $61m = $98. So.. the cost, to the providers, of delivering 50 billion text messages in the United Kingdom is $98? I'm not buying it.

Re:I call shenangians (1)

SQL Error (16383) | more than 6 years ago | (#22219300)

No, but 50 billion SMS messages is, let's say, 2TB of data (40 characters each, which is pretty generous). I pay 10c per GB for bandwidth at my hosting provider, so that would cost me $200 to send over the internet. Tweak the numbers a little and you can get closer to the $98 figure.

Two reasons (1)

Yousef (66495) | more than 6 years ago | (#22219156)

1. The public are ignorant of the true costs.
2. The Telcos (like many other corporations) are thieving bastards.

Funny thing is, most of the public still wouldn't do anything about this even if they knew. They accept the bills that they get and the roaming costs and the data costs - irrespective of how much they are actually worth.

I wish someone would explain to me why roaming data (browsing internet while overseas) costs an extortionate amount more than when browsing it locally (especially when you are being served by the same damned carrier Vodafone in both countries). Do they bill for each individual router hop?!

data over sms WTF? (1)

timmarhy (659436) | more than 6 years ago | (#22219194)

"sending an amount of data that would cost $1 from your ISP would cost over $61 million if you were to send it over SMS"

has to be a shoe in for the most retarded comparison of the year?

yes teleco's are gouging us on everything not just sms, hence why i only have a prepaid mobile i hardly use and my home phone is VOIP. my annual telephone bill/internet/mobile expenses are under $1200.

because they can (1)

Tom (822) | more than 6 years ago | (#22219214)

How can carriers continue to justify the high cost of their apparent super-premium data transmission?
It really is that simple: Because they can.

People are still using SMS, even though in many cases, actually calling by phone would be cheaper and more convenient. I'm not talking about the "I'll arrive at 11:20" message, I'm talking about the actual SMS "chats" that lots of young people engage in. 10, 20 SMS go back and forth easily. Maybe I'm getting old, but I simply don't understand why they don't simply call each other. It'd be faster and cheaper.

Re:because they can (1)

nojobjones (1148409) | more than 6 years ago | (#22219416)

uh i'm almost 30 and i txt with my friends and parents constantly. we have things called meetings, movies, class, etc. there are plenty of reasons to txt instead of talking. if you have an unlimited texting plan it's not any cheaper to call.

Re:because they can (1)

Facegarden (967477) | more than 6 years ago | (#22219426)

I do this, and i can really easily explain why i do it. Most of my texting occurs in between all the times i'm really doing something. Lets say i'm waiting for some code to compile (feel free to reference XKCD anyone) and i only have 30 seconds of down time. I can't call someone, because i'll be busy in just a moment anyway, but I can send them a text, and i have the freedom to respond again whenever i have another small spat of down time. By that same virtue, my text gives them something to read and respond to in between their bits of real work, and gives them the freedom to respond when it's convenient. It's mostly small talk anyway, lots of pointless conversation that isn't worth calling the person for. But mostly it just gives me something to do on my short bits of downtime, with the perk of letting me communicate with friends. I don't have to worry if they're free to answer the phone, because if they're busy they'll just read my text later. It works very well. -Taylor

Price Fixing (0)

Anonymous Coward | more than 6 years ago | (#22219248)

Why has the cost of bandwidth, infrastructure, and technology in general plummeted while the price of SMS messages have risen so egregiously? How can carriers continue to justify the high cost of their apparent super-premium data transmission?

It's called price fixing, basically a spoken or unspoken shared monopoly. Same reason they sell virtually costless mp3's for 99 cents, or gasoline for $3/gallon when just a few short years ago it was half that price:

1. Join in a secret agreement to sodomize the plebs
2. ???
3. Profit!!!

I know! (5, Informative)

eiapoce (1049910) | more than 6 years ago | (#22219254)

I know the true cost of SMS messages!

I made a paper for the univeristy some years ago. The marginal cost of a SMS is 0.

They do have a little cost/opportunity. As a matter of fact SMS messages are sent on the control channel. Initially SMS were implemented in the GSM standard as a control system, just like the ICMP protocol of the IP stack. Then NOKIA though to implement a actual instant message function using SMS. The Contol channel is the channel that your mobile listens to in order to receive calls. So for receiving a SMS a control signal is sent. Since bandwidht is somehow limited on these channels it could happen that in a situation of massive usage of texting the control channel gets saturated and normal voice protocol initiation is disrupted. To prevent this carriers nowadays apply a kind of QoS delaying SMSs until there is no risk of congestion. So we can state that the marginal cost is 0 and the cost/opportunity is also 0

Another story is for the MMSs. Their cost/opportunity is even lower since they run almost enterely on GPRS thus using most bandwidht on normal data channels. Thus a MMS with pictures sounds and maybe video SHOULD cost less than a SMS.

So you wonder, why do I pay so much for a SMS or a MMS or even a Call: after the debts for the initial hardware infrastructure have been paid by the carrier you are still paying because of market segmentation (You won't change the carrier on the fly) and a little monopoly (Almost impossible to start a new carrier from 0).

I hope ou liked the summary!

some convenient fallacies here (4, Insightful)

wannasleep (668379) | more than 6 years ago | (#22219276)

While I am no fan of AT&T, and certainly agree that the cost of an SMS is outrageous by any standard, but the article contains several fallacies.

  • The most common fallacy is mistaking the marginal cost of sending one SMS with the total cost. The marginal cost is basically zero, which is the point of the article. However, AT&T pays for a bunch of items that at a first approximation don't vary with the number of SMS sent through the network. There are many ways to account for these costs and there are entire university classes which deal with this type of calculations. However, when your network costs few billion dollars, a billion here, a billion there, soon we are talking about real money. The same applies to marketing costs, customer support, etc.
  • The author conveniently forgets that there is also a termination fee that a provider pays when messages originating from one network (e.g. AT&T) are delivered to phones on a different network (e.g. T-Mobile). So, some messages cost more, raising the overall average. Same apply for roaming charges, if any.
  • The author also miscalculates the number of bytes necessary to send an SMS conveniently forgetting the envelope, i.e. phone number of the sender, subject, time, etc. I am sure that his ISP doesn't subtract overhead from the 500GB of data he pays for.
  • Also, the author takes an average of 80 characters for the cost of SMS and compares them with the max number of words/characters you can send via US mail. An unfair comparison.
All in all, all fallacies skew the numbers towards the point that the author is trying to make, which is quite unethical. It is also stupid because a fair comparison would totally support his point, just with slightly less astounding numbers.

apples and oranges (3, Insightful)

joebob2000 (840395) | more than 6 years ago | (#22219372)

The article promises to tell us about the "true cost of SMS" but never actually does this.

Cellular networks are very different than the data networks. One big difference is that while our data networks are connectionless, the focus of cellular networks is on connections. Operators must balance the use of SMS messages with the normal call traffic. Perhaps SMS use is disrupting normal call traffic and the operators are using the free market to curb SMS volume?

Modern cellular protocols are reducing the connection-centricity of the networks and the price of text messages will likely come down, but at that point the messages will probably be run over 3G instead of the SMS mechanism.

When I was in Japan... (1)

pcgabe (712924) | more than 6 years ago | (#22219396)

When I was in Japan, I got my first mobile phone. SMS messages were always free. Free to send, free to receive. If I were sending messages to a phone on the same service as myself, I could send larger messages (250 characters, I think). On other services, I was limited to 80 characters or so. Still, free free free, and if I needed to say more, I could send two messages, or compose a longer e-mail (but the e-mail wasn't free). This was on that $9/month plan. [softbank.jp]

That's still how I think of SMS messaging.

But then I returned to America. 15 cents a message? 15 cents for each RECEIVED message? I don't have any control over that! It's BULLSHIT.

No volume (1)

rocannon (605760) | more than 6 years ago | (#22219402)

Try comparing the cost if you want to send not more data than 3 SMSs per month.

Answer: Teenage Girls (1)

im_thatoneguy (819432) | more than 6 years ago | (#22219414)

>>How can carriers continue to justify the high cost of their apparent super-premium data transmission?

Simple. Teenage girls who don't ever see the cell phone bill.
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