The issue is that demand to SMS is pretty inflexible, whereas demand for wherever the cost is really coming from probably is not. The Telcos are using SMS mone

The issue is that demand to SMS is pretty inflexible, whereas demand for wherever the cost is really coming from probably is not. The Telcos are using SMS money to subsidize more expensive parts of the business that people will probably opt out of if they were charged the full amount. I don't know enough to say what those are, but you're right, the SMS money probably isn't all profit. Right-pricing SMS will probably mean that some other part of the business would be cut back (unfortunately R&D is often a victim). When the current shareholders are pitted against the future shareholders, the future shareholders often lose.