In this case it is a free lunch. SMS was specifically designed to make use of an unused portion of communication between handset and tower. Thus, the limit of 1

In this case it is a free lunch. SMS was specifically designed to make use of an unused portion of communication between handset and tower. Thus, the limit of 1,120 bits (140 8-bit chars, or the now standard 160 7-bit chars). No extra time slots are needed to accomodate SMS, because it's bandwidth usage is dramatically lower than that of voice data. As you said, it's still data. If one has a plan that includes unlimited internet data, where is the justification to charge even more for SMS? But none of that really matters, because it's not the cost of the product that determines pricing. It's the delivered value that determines pricing.