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SMS 4x More Expensive Than Data From Hubble
paradoxSpirit writes "Physorg has a paper comparing the cost of text messaging versus the cost of getting data from Hubble Space Telescope. From the article: 'The maximum size for a text message is 160 characters, which takes 140 bytes because there are only 7 bits per character in the text messaging system, and we assume the average price for a text message is 5p. There are 1,048,576 bytes in a megabyte, so that's 1 million/140 = 7490 text messages to transmit one megabyte. At 5p each, that's £374.49 [$732.95] per MB — or about 4.4 times more expensive than the 'most pessimistic' estimate for Hubble Space Telescope transmission costs." "Hubble is by no means a cheap mission — but the mobile phone text costs were pretty astronomical!""
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?"
http://tech.slashdot.org/article.pl?sid=08/01/29/0244208&from=rss
every day http://en.wikipedia.org/wiki/Special:Random
And don't forget that both the sender *and* the recipient pay for a text message for every one sent.
Sprint's charging $0.20 each for these now-a-day (unless you have another plan of some sort). It's just the latest ripoff in the mobile phone industry.
If you look into the dim and distant past SMS was a free service that came with your phone 'package'. Then they realised they could actually make money from it.
Ironically the price of an SMS is dropping and it actually costs somebody who 'bulk' buys 10000 messages around about 1.5p .
My concern is that it is getting so cheap, that I've already started receiving spam SMS.
As an aside, some companies now provide a SIM card hosting service. So if you can get the right package from an Operator (e.g. unlimited SMS messages) there is nothing to stop you spamming the world.
Thankfully 'clicking' on any links is not so simple and most people realise clicking actually costs them money.
In the Netherlands 0.25 euro (16p or $0.38) per message is quite common. For that price I can call 1.67 minutes.
But that doesn't matter for me. I don't use text messages for the simple reason that I don't think it's worth the price.
So when you factor in these novelty SMS messages, the ratio becomes much worse.
I have never seen any hard data on the actual costs of sending a SMS message across GSM/CDMA cell towers, but I expect that the profit margins on a SMS message make Monster look positively razor thin with it's own margins.
The reason why anyone with a brain (even a damaged/inebriated/mutated one) can see how ridiculous the price points on SMS is pretty simple.
Take a mid-range T-Mobile calling plan. Say the individual 1000 minutes for 49.99$. That is 4.9c per MINUTE of a telephone conversation.
Until quite recently, a SMS text message plan did not have unlimited messages. They do have this now for 14.99$ at T-Mobile. The plan right below that? 9.99$ a month for 1000 messages. Yep, that is 1c per text message. I had always remembered plans that were 250 messages for 4.99$ at various places, which is 1.9c per text message.
So does anyone really beleive that a SMS text message can cost 20-25% as much as a minute of a cellphone call?
I certainly didn't think so. Raise your hands if you think that is right. Anyone? Anyone at all?
SMS was ALWAYS their little cash machine. Most people never paid attention to it, or considered the real costs involved and I would bet 4-5 digit profit margins at a minimum for the past decade.
Actually, the standard rate for text messaging in the UK is 10p, not 5p
160 characters * (7 bits/character) * (1 byte/8 bits) = 140 bytes
TFA is talking about the transfer of data, not how many little bits are actually involved in the transaction. Headers and transmission overhead are not data. If you downloaded a CD ISO, you would not say that you downloaded 946MB and include "overhead" in your figure. Did you include your name and the class number in the word count for your papers in college?
I'm not sure the exact costs that the carriers incure when people send a text message but I do remember this:
After the freeway collapse in Mineapollis last year, the cell companies told people to text rather than call in large emergencies because it uses significantly less resources.
I'm sure they have a way of putting a block on a particular service -- I've been with Cingular (before the AT&T merge) and Sprint and both of them can block SMS, you just have to call and push the CSR to do it. And if they tell you they can't, ask for next-tier support. If they tell you no, threaten to take the matter up with your state's AG and the FCC. That usually gets a quick response. (If Sprint can do it, and their customer service is quite possibly the worst I've ever encountered, then T-Mobile can do it.)
In-flight calls or data are a poor example. You're talking about putting in equipment that costs more than typical network equipment because of requirements like low EMI, light weight, minimal maintenance, ground stations to handle the data, programming to manage handoffs at 500+ mph, and the process of getting FAA approval when you integrate it with a jillion other systems on a commercial airliner. It genuinely is expensive. Even at $10/hour that Boeing was charging for their Connexion internet service, they lost huge amounts of money on it (I think partially because they over-engineered the system, but I'm not very familiar with the details).
The cost of using it are very low, but the costs to initially add the feature are very high. Then you add in the fact that usage rates are typically low (only a handful of passengers buy it, only "full-service" airlines install the equipment), it can be hard to make it pay for itself.
Of course, they do add a high margin on top of their projected costs because they can without affecting the demand much, but the fixed costs still dominate (at the moment...data services will be much better integrated in the coming generation of airliners, and we may be moving towards allowing cell phones in flight, too).
SMS is the opposite. They aren't seeing low usage on new, expensive infrastructure. They're seeing high usage on existing, paid-for infrastructure.
The SMS scheme really isn't a very good one. SMS messages get multiplexed into the control channels on the mobile phone network, and it's really a 2nd generation technology. The size of the control channels is fundamentally limited, but each slot is big enough for a text message. So the providers squeeze the SMS into it because it fits and it doesn't require re-engineering their protocols to fit it in the voice channels. This is also why SMS is limited to so few characters: That's what fits in a time-division on the control channel.
Unfortunately, it proved to be a popular service. The limited extra space fills up quickly. In fact, it's theoretically possible to launch a relatively wide-area DDoS attack by sending only a couple hundred messages per second from zombie clients. To get the best return on their existing capacity, providers raise the price to discourage excessive use.
The puzzling thing in my opinion is that it's taking so long for this service to shift from being side-banded in the 2G scheme to being normal data packets on 3G networks. As that happens, the capacity for text explodes (text is way more compact than voice, pictures, video and other planned 3G content) and the providers can leverage the genuinely low cost of text to undersell their competitor's plans. A pricewar ensues and the consumers win.
But it hasn't happened yet. My best guess is because the companies realize that the first one to make a substantial move in this direction will only enjoy success for a short time before the others all catch up. Then the competitive advantage is gone and profits have dropped close to zero.
No, I haven't sourced much of this. It's mostly conclusions from discussions with friends who work in the mobile industry. Feel free to correct the parts I got wrong.