4 ms·

"They will likely compete with each other to drive down prices per unit of usage" I would say this is very unlikely. Look at call minutes, look at SMS messages

by ajg1977 16y ago

"They will likely compete with each other to drive down prices per unit of usage" I would say this is very unlikely. Look at call minutes, look at SMS messages. Both of these have plenty of scope for carriers to cut costs and compete while still being a profitable item. Do the carriers do this? No, not at all. They all keep their prices artificially high and roughly equivalent because it is in their joint interests not to compete too much. If you look outside the US, there are plenty of telco's who's data prices are way higher and kept their for exactly this reason.

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thwarted 16y ago
I frequently see two tiers of SMS pricing, either you get some block of messages that are included and scaled with the number of minutes you have, or unlimited.
bonzoesc 16y ago
Both voice minutes and SMS tranches are for a mostly static demand though. I suspect that most users use about the same amount of voice minutes and SMS messages as they did last year (at least if they are in a similar cell/landline situation from year to year). However, data demand isn't static, and it's going up. So I wouldn't expect to see data prices stay as stagnant as voice minute and SMS prices have, especially since that's the lucrative growth area cell networks have now.
- ajg1977 16y ago
  According to CTIA, text message usage in the US grew 50% between 2008 and 2009, and so far in 2010 the increase is even greater. Can you guess what's happened to prices?
matwood 16y ago
SMS is it's own beast, but call minutes are already very cheap. I remember when 100 minutes was insanely expensive and now my only phone is a cell phone with enough minutes that I never think about it when I'm talking to someone. Carriers could compete on talk minute price, but they know that few people care. Those that do have already moved to something like Boost Mobile or one of the other low cost providers (most are owned by the big boys, so you could say they are already competing with lower prices just with a different brand). SMS messaging while a ripoff from a production cost standpoint is not all that bad from the consumer view. For $10-$15/month someone can do unlimited SMS. From a cost to communicate with anyone and everyone as often as someone likes standpoint that is a very cheap price. Also, people don't really care enough to move providers in order to save $5 when they would rather have either coverage, service or a certain phone. Are the carrier prices really artificially high? I will say they have some wiggle room, but they are walking a fine line of price they need to charge in order to build out the network across the entire US with the lastest tech and still somehow turn a little profit at the end of the day. Net Profit Margin for the 1Q of this year: VZ - 8.49% T - 8.36% S - (10.7%) Not exactly price gouging numbers above.

by ajg1977 16y ago

deleted 16y ago

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thwarted 16y ago

I frequently see two tiers of SMS pricing, either you get some block of messages that are included and scaled with the number of minutes you have, or unlimited.

bonzoesc 16y ago

Both voice minutes and SMS tranches are for a mostly static demand though. I suspect that most users use about the same amount of voice minutes and SMS messages as they did last year (at least if they are in a similar cell/landline situation from year to year). However, data demand isn't static, and it's going up. So I wouldn't expect to see data prices stay as stagnant as voice minute and SMS prices have, especially since that's the lucrative growth area cell networks have now.

ajg1977 16y ago
According to CTIA, text message usage in the US grew 50% between 2008 and 2009, and so far in 2010 the increase is even greater. Can you guess what's happened to prices?

matwood 16y ago

SMS is it's own beast, but call minutes are already very cheap. I remember when 100 minutes was insanely expensive and now my only phone is a cell phone with enough minutes that I never think about it when I'm talking to someone. Carriers could compete on talk minute price, but they know that few people care. Those that do have already moved to something like Boost Mobile or one of the other low cost providers (most are owned by the big boys, so you could say they are already competing with lower prices just with a different brand). SMS messaging while a ripoff from a production cost standpoint is not all that bad from the consumer view. For $10-$15/month someone can do unlimited SMS. From a cost to communicate with anyone and everyone as often as someone likes standpoint that is a very cheap price. Also, people don't really care enough to move providers in order to save $5 when they would rather have either coverage, service or a certain phone. Are the carrier prices really artificially high? I will say they have some wiggle room, but they are walking a fine line of price they need to charge in order to build out the network across the entire US with the lastest tech and still somehow turn a little profit at the end of the day. Net Profit Margin for the 1Q of this year: VZ - 8.49% T - 8.36% S - (10.7%) Not exactly price gouging numbers above.