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Telcos charge more to send a text next door than cost of sending data from Mars
- 001sky 14y agoTheres no cost to send a text[1], because they are sent thru overhead comms channels built into the network standard. > Pricing of texts == jedi mindtrick ______ [1] to the carriers; no bandwidth is used.
- untog 14y agoBut it doesn't go straight next door. It goes to a cell tower and then is pinged back again, possibly through other cell towers if the person is on another network. Don't get me wrong, SMS prices are insane. But this is a bad example.
- leeoniya 14y agothe problem with this argument is that there is not an unlimited capacity for telcos to transmit these messages. if 1,000,000 people decided they needed to send a message to mars in the next 6 hours, you can bet your ass those messages would be $25.00 each, or more. it's also not fair to simply compare the amount of data. when you send a message you're borrowing a channel / band. the transmission tech and spectrum has a certain capacity, that's why it gets auctioned and licensed for big bucks. i would also not be surprised if telcos spent 400 million maintaining, updating and building out the infrastructure. btw, someone correct me if i'm wrong here. i'm not defending the fact that text messages are extortion in every sense of the word and the reality that they're more expensive than a real-time voice call is the part that's really hard to grasp.
- deleted 14y ago[deleted]
- jacquesm 14y ago> the problem with this argument is that there is not an unlimited capacity for telcos to transmit these messages. No, the problem is that there is a fixed amount of bandwidth to each phone used for status messages anyway so even if you wanted to get unlimited capacity to a device you could not. It's not as if these text messages are sent in a stream of their own, they simply ride along on slots already allocated to your device. From a telco perspective they're 100% free.
- RileyJames 14y agoMy text messages in Australia are still $0.25, although thats probably because of the "cap value" plans we have. Lets not get started on mobile "data" charges.
- T-Winsnes 14y agoBeing in Australia I should mention that I don't pay for text on my $30 a month plan :)
- curiousdannii 14y agoThese plans make it impossible to compare between the companies -- I hate them! $30 gets you $200 credit with one but $300 with another, the first might have $0.25 texts, the second $0.20, the first might have a flagfall, the second might not. I wish the ACCC would make such things illegal.
- stevvooe 14y agoI don't see how this is a "failure of the free market". Text messaging prices are fixed because one can't freely move their plan and hardware from telco to telco when one gets cheaper or better.
- sterna 14y agoYou can call it what you want but one thing is for sure. These prices demonstrate that the competition on the US telecom market is limited. In Denmark you only pay for out going sms (typically around 5 cent) and you can get a plan with unlimited sms, 7 hours of calls and 2 GB of data for 20 $ a month. This is because we have fierce competition on our telecom market as a result of the old monopoly company being forced by government to lease their network to upstarts at fair rates.
- xyzzy123 14y agoPricing is based on what people are willing to pay (value to consumer) and not at all on what the service might cost to provide. Obviously, competition is a factor too. For light users, sending a hundred SMSs a month probably does provide $5 worth of value. For heavy users there are various plans and bundles which will let you send lots rather more cheaply. I think the way SMS is priced is more of an indicator of how people can ignore small transaction costs when there is zero payment friction. SMS is probably the most successful micropayment system around. Although of course, all the payments go to the telco ;)
- Firehed 14y ago25¢ to receive a message is not something I'm willing to pay; it's something I literally have no way out of if I want a cell phone and don't want to cough up even more for unlimited SMS. AFAIK there's no way to just turn off SMS entirely, which I'd be more than happy to do as I've completely replaced it with various data-based services that I'm also paying for in my monthly bill (email, IM, iMessage, google voice, etc.) Even if I am able to disable SMS completely (without screwing up the parts of my plan that I actually like, at least), it's problematic because of the handful of people that do text me, they'd have no way of knowing that I never got the message (unless the telco would automatically respond on my behalf saying that number can't receive texts; I doubt this is the case). Some SMS-based services don't work with Google Voice and MMS is completely unsupported by it, and there's absolutely no fallback let alone a graceful one.
- mattmaroon 14y agoI dont think so. Hardly anyone in the US pays for texts a la carte, and when they do, they went over their contract allotment and are pissed about it. I don't think hitting people with an unexpected $300 bill at the end of the month because they didn't realize they could have spent $5 more for unlimited plans is a great model for micropayments.
- xyzzy123 14y agoI always wondered how people managed to send, on average, 1 SMS every 4 minutes, for 12 hours a day, every day. I'm not sure I could do that even if someone paid me to. The surprise $300 bills you are talking about, they're teenagers right?
- mattmaroon 14y agoThese rants against text message pricing pop up from time to time and always neglect one fact: by volume, almost nobody pays 5 cents a text. Most text messages are sent by someone who just pays $10 per month or something like that for unlimited texts, then sends thousands of them.
- aw3c2 14y agosource or at least some reasonable napkin calculation?
- mattmaroon 14y agoThe average teenager alone sends over 3000 texts per month. At 5 cents per, that's $150 for SMS alone. Think the average teenager spends $150/mo on SMS? Or pays the $10 fee for unlimited?
- spindritf 14y agoThis shows up every once in a while in rants against telcos but "price per kB of text message" is a completely pointless metric because no one really cares about it. On one side the company has to operate the network, pay the employees and still generate some profit, so they care about total ROI. On the other, the customer wants to communicate, which includes text messages, voice and data transmission, so they care about the price of that bundle which often just includes unlimited texts. How many people really want the services they use to be priced like AWS and pay separately a few cents for each time they use any tiny component? And is it really a market failure when they're not billed like that or can you Google "market failure"?
- pyre 14y agoWhy is it then that the US cellular providers are the only ones that charge for incoming texts? This doesn't seem like a case where if they didn't charge for it, their entire business model would collapse. At least for US cellular providers, it's very clearly a tactic to push people towards paying monthly for 'unlimited text messaging' by attempting to make the per-message pricing prohibitively expensive. The "illusion of options" so to speak. Providing you with multiple options, but making sure that only one of the options makes economic sense (ensuring that the majority of people choose it).
- spindritf 14y ago> Why is it then that the US cellular providers are the only ones that charge for incoming texts? Why would anyone care how their bill is sliced? Why do you care about anything beyond the total cost of owning a (smart)phone per month or year? Incoming texts, outgoing texts, network upkeep... it's a meaningless line on the bill. Sure, some configurations will be a little better for you, some will be a little better for someone else depending on your usage pattern but in the end telcos have to pay their own bills, and have something on top for their investors, so they'll charge you somehow for something.
- manaskarekar 14y agoIt matters because not all users use all the services. The ones who use the services that bear the burden of 'paying the bills for the carriers' are the ones who are subsidizing other services for you.
- millstone 14y agoAverage text messages per user are down, for the first time ever. See http://bits.blogs.nytimes.com/2012/11/12/text-messaging-declines-united-states/ http://bits.blogs.nytimes.com/2012/11/12/text-messaging-decl... . The article blames Facebook and Apple's iMessage, but the price of text messages has to be a factor as well. On AT&T, it's $20 a month for unlimited messages, or 20 cents per, in and out.
- pyre 14y agoThe 20 cents per incoming message is the bogus part. Especially when you get spammed, and have to pay to receive an unsolicited advertisement (and the fact that telcos don't do much to curb this because they just pull in the money off of it).
- vacri 14y agoA friend of mine works in a company where the managers demand every nagios alert gets SMS'd, no matter how minor. They literally receive multiple hundreds of SMSs every week. Expanding into the US, the tech in the SF office had to upgrade his cell plan. Later in his first week, he had to upgrade it again. Then again. Ops keep telling management about just how bad this policy is, but management like have a paper-trail for blamestorming.
- vacri 14y agoTired of cost analyses that completely ignore price of wages and maintenance. Does NASA have to staff hundreds if not thousands of little shops in order to keep its product moving? Then there's good old confirmation bias. "Hey, let's assume the mars rover was constantly transmitting at the maximum rate the entire time!" - never mind finding out the actual number, just assume that the maximum was the average. Yeah, that works. Not to mention "Only next door!!!!!" when the same prices apply to "The other side of the continent". If you're really feeling ripped off about sending short messages to the people next door, just open your window and shout instead. Oh, then we'll also say "transfer across the wire is only 25c!" when SMSes are definitively not meant for transfer only across the wire. Then we'll italicise words like personal insult, which is egregiously amateurish. I wonder if the author would go to a lawyer to handle the paperwork around a housing purchase, and the complain that he has to pay far more than the simple costs to lodge the papers. "What? $1k? But lodging the papers only costs $50, I looked it up!"