The True Cost of SMS Messages

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?"

Comments

Justification

[Mike1024]

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:Offer and demand

[Charcharodon]

That's a crock. A Text message is nothing more than a very short email, somehow email has managed to chug along just fine, for free no less.

SMS is just like just about anything from Apple, really good marketing of an old product at premium prices and a large audience of people that don't know any better.

Re:I wish it was the same in the UK

[digitig]

You know what else is work appropriate? A ringing tone. So everybody in the open plan office stops work to answer the phone when yours rings. Great plan.

Or even just vibration. So that's where you keep your phone! No wonder it takes 20 seconds to get it out.