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What Carriers Don't Want You To Know About Texting
An anonymous reader writes "Randall Stross has just published a sobering article in The New York Times about how the four major US wireless carriers don't want anyone to know the actual cost structure of text message services to avoid public outrage over the doubling of a-la-carte per-message fees over the last three years. The truth is that text messages are 'stowaways' inside the control channel — bandwidth that is there whether it is used for texting or not — and 160 bytes per message is a tiny amount of data to store-and-forward over tower-to-tower landlines. In essence it costs carriers practically nothing to transmit even trillions of text messages. When text usage goes up, the carriers don't even have to install new infrastructure as long as it is proportional to voice usage. This makes me dream of the day when there is real competition in the wireless industry, not this gang-of-four oligopoly."
The feckless youth I see texting in public do not appear to be the sort who employ reason or critical faculties. That's the kind of customer base dreams are made of.
The cost of that cleanup, of course, will be borne by taxpayers, not industry.
...but it's good to see this fact receiving some mainstream attention. I guess it's inevitable that people now tend to ask that if it costs x dollars to transfer y megabyte from my phone, why do text messages cost a lot more when they are so tiny? In the digital age text message fees seem more and more ludicrous even to ordinary people.
It takes a man to suffer ignorance and smile
Be yourself no matter what they say
Of when we'll be nickled and dimed for text messages instead of quartered.
As a service that the operators could milk their customers with. It was only when it started getting popular that they heard the cha-ching sounds and start charging outrageous fees.
Spose its just me since I've worked on mobile phones for 3 years but I already knew this. Its not that the messages cost anything like that. its that they can so its done. If they could still get away with charging $10 per minute for a phone call they would do the same thing.
Next you'll be telling me that when you buy Coca-Cola, you're mostly just getting sugar and water!
"Wise men talk because they have something to say; fools, because they have to say something" - Plato
Addictive behavior (texting) + Monopolistic cellular rule over addictive technology = obscene rates.
Even Larry Ellison is sitting back looking at his cellular bill going "Holy shit. And I thought I ripped people off."
The truth is that text messages are 'stowaways' inside the control channel â" bandwidth that is there whether it is used for texting or not â" and 160 bytes per message is a tiny amount of data to store-and-forward over tower-to-tower landlines.
From what I understand, the problem with SMS's sent on the GSM standard is that it is in the control channel - as the anonymous submitter stated. But there's only one control channel for each cell versus many data (voice, etc) channels, and it has a lot less bandwidth than even one data channel. It was only ever meant to handle connecting calls, phones moving from one cell to another, etc. Administrative stuff. SMS was never meant as a proper way to move lots of messages. But it's now a major form of communication and it's using a channel (the control channel) that is very limited.
When "text usage goes up", I'm guessing the only thing the carriers can do is to install more cells in order to get more control channels. But surely there's a limit to how many cells can co-exist in a given area. But everyone's moving to various "3G" networks and AFAIK they have proper means to send messages, photos, videos, etc. The anonymous submitter is still an idiot though.
In Japan there's this magic concept. The $30 plan actually costs $30! Go figure! A brand new cell phone is also free with no contact. And you can watch TV for free on your cellphone. But, don't let the Americans know or they'll want decent service too! ...oops!
Classic economics says that things are priced what people are willing to pay for them, and are not based on how much the cost to make.
As long as people are willing to pay 10 cents per text, that's how much carriers will charge, regardless of how many there are.
The cake is a pie
Remember: these people are in the business of making money. If they can charge many times their cost to send text messages, they will. There are far too many things in this world that are governed by money, not that which is technologically possible. And as a scientist - there's a certain lack of purity in that, which I very much dislike.
Excuse for why is your room always messy?
When text usage goes up, the carriers don't have to install new infrastructure as long as it is proportional to voice usage.
Quiz time! What will happen if the price of text messages goes down? Will it INCREASE or DECREASE the use of text messaging compared to voice usage? People never seem to get that the product price is not only the costs+profits, but also the additional costs if the demand grows larger or smaller. I imagine the operators have found the ideal text/voice ratio and are pricing the product so that the maximum capacity of the current network is in use. I don't know about USA, but at least in Europe the youths prefer using text messages over talking, so keeping the ratio in the sweet spot might be somewhat hard. In Finland cost for both voice-per-minute and text are 6,9 eurocents (that's what? 8 american cents?), pretty much from every operator you can name. How much do they cost in your part of the world?
Chronologically late.
##(Verizon Wireless would not speak with me, either, nor would it allow Mr. Kohl's office to release publicly its written response.)##
Uh, Senaturd Kohl of Wisconsin can release any damn thing he pleases. And ANY and ALL correspondence sent to anybody is owned by the recipient who can publish it as they please.
The Honorable Senaturd is finagling for a (ahem) campaign donation.
The New York Slimes is hiding the fact this criminal overcharging was caused by Democrats. It's another version of the Community Reinvestment Act. They got one thing right though, text messaging is without additional overhead.
I have a data plan, but I just refuse to text until it is reasonably priced.
Yes it uses a control channel that existed already. That doesn't mean this said channel hasn't had to be beefed up, the signal quality improved everywhere as what was acceptable for the odd, low priority message isn't good for large amounts of bandwidth being thrown around. Just like phone lines weren't designed for data but when they started being used for it, phone companies had to go around improving exchanges, replacing old wiring etc.
160bytes isn't much but that's still data that has undergo handshaking, be routed around a limited bandwidth network, processed to find the destination then sent to the destination phone. It's incredibly inefficient to do this for a small amount of data. It's also incredibly costly to manage lots of minuscule transactions. To price it on pure bandwidth costs is stupid. It costs phone companies a hell of a lot more to send 1000 texts than it does for a 3G user to download a 160kb image.
It's true for pretty much every business everywhere that if you do things in incredibly tiny properties, you're going to be charged through the roof. If I did a home delivery service from a supermarket and bought just 1 banana, that banana would cost me £5.10. If I ordered 100, each banana would cost me £0.15. It doesn't matter than my house is on the delivery truck's route and they'd use no additional petrol and only minimal time to deliver the single banana, I would still have an incredibly expensive banana.
Rotten, rotten, rotten... Back to smoke signals then?
The SMS channel uses 7-bit ascii, so those 160 characters are only using 140 bytes.
Charging for receiving messages, which some US carriers seem to do, is just adding insult to injury.
Terje
"almost all programming can be viewed as an exercise in caching"
While it is true that Short Messages are sent in the control channel, therefore don't use up bandwidth which could be used for other billable services and are consequently "free", the bandwidth in the control channel is limited and can't be increased: High demand, limited supply = high price.
It was all a great idea, but nowadays it's just stupid, because there is a viable alternative to using the control channel for messaging: packets. GPRS and UMTS/3G offer communication outside of connections through packet based protocols. These protocols are used for multimedia messaging, but instead of also using them to send and receive text messages, which would cost fractions of a cent that way, SMS are still sent via the control channel. The inertia is incredible. Consumers should learn about packet based IM on cellphones, but they apparently prefer to stay ignorant of the technical possibilities and keep paying a premium for a few bytes of SMS.
Is there really 4 players in the wireless market? I live in the mid atlantic and t-mobile is non-existant with barely 1 signal bar coverage along the 2 major highways, and zero bars in both the metro core and suburbs. Sprint/Nextel has slightly better coverage with good signal along the highways, mediocre coverage downtown, with medium coverage in the suburbs with LOTS of holes in coverage. AT&T has good coverage everywhere, however, their mobile data service is dialup speed, nothing high speed in our area. Verizon has amazing coverage and high speed everwhere, but it's Verizon! It's like selling your soul to the devil. Pretty much there is a mononpoly, Verizon, that is it. Maybe you can say there's a Duopoly, but AT&T only has the people that got kicked off Verizon for non-payment, etc. There definately needs to be more players in the marketplace, you shouldn't have to spend $100++ a month for service. I barely use my phone, so I use Verizon's pay-as-you-go which is a fair deal @ $30 a month with no taxes, but $0.10 per text, so I hate when I receive those. If texting were free I'd be pretty happy with price. I just hate the cheapest plan is $39.95 a month + taxes = $46.xx + texting plan = $56.xx a month. So,the $30 gophone works for me, because I can do 250 texts and still be cheaper than a plan.
Smash capitalism with workers revolution!!!!
Undoubtedly there is truth to the article posted. However while the bandwidth is there, the mechanism to store and forward messages is not given nor does it come for free. There are companies selling servers that perform the arduous task of receiving and sending sms's -- servers as IT servers with storage arrays, multi core cpus and expensive hardware to interconnect them to the telco interfaces. All that gear, hardware+software cost thousands of $ that the telco providers need to invest in.
Despite that, of course, text messaging is, without question, a great revenue maker to the mobile phone operators.
I've known this for a long time now, but it still makes me hate the cell companies even more than I have in the past. It's things like this that make me want to trash my cell phone. I mean, it's easy to say you NEED a cell phone, but really, do you?
I went into a Verizon store last week to return a new phone I had gotten and the store tried to charge me a $35 restocking fee on the phone. I looked at their return policy and it said that I had to pay a restocking fee IF I was exchanging the phone, not if I was returning it. The sales guy called the manager and he starts reading the return policy a few times before he says..."Uh, yeah it looks like you don't have to pay the $35". The freaking manager of the store didn't know their return policy. WTF! I wonder how many people have (and will) paid the $35 when they didn't have to. Of course the reason I returned the phone was because Verizon has started FORCING you to subscribe to a data plan if you have a "smart phone". I didn't want to buy a phone for data usage over the air, I wanted one that I could use to check my email, skype, play games, etc over it's WiFi connection (most often when I'm out of the country). But no. You can't buy a smart phone from Verizon without paying at least $30 a month to them. Go figure. It was this treatment/policies that made me realize how much I don't want a cell phone...not by their rules anyways. If only there was a reasonable cell carrier in the USA.
I guess I should thank Verizon though. It was their shit policies and customer service (waiting 40 minutes in a line to return a phone) that made me ask my boss if I could port my cell number to my work phone (BlackBerry) and just use my work phone as my primary cell. When I found out the answer was yes, goodbye Verizon, goodbye cell bill, goodbye shitty contracts, and goodbye having two phones. Uhhhh I can feel the freedom already.
When my girlfriend and I got together earlier this year, she was big into texting and got me into it. Since then, we've sent & received as much as 40,000 text messages a month combined. We each pay an extra $10 per month to enjoy this unlimited and unrestricted service, and I'd have to say it's been a key element in our relationship. 40,000 * 160 bytes = 6.4 MB. From what I read on Techdirt, it claims that communications between Hubble and Earth cost around $18/MB; in conclusion, I'd say the rates I pay for texting are actually a bargain. Granted - I could ge wrong somewhere in here, but from my math it seems that I'm not getting ripped off. If anyone can correct me, by all means go ahead so I can learn something. ^^^6^^^
When the spirit is so digital, the body acts this way. 6^^^Folk^^^6 'til I Choke; 12-7-4 LGD 'til I Croak.
SMS is just a special case of very low-bandwidth data traffic, which should be superseded by email or jabber anyway.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
The carriers have to make money: texts are used to subsidise other services. If they aren't allowed to charge such a high fee then voice goes up. There are plenty in the UK who barely use voice, so the carriers must find ways of making money from them.
Unless one accepts a general principle against subsidy (which infact I personally do as it obscures, causes distortions and also bubbles) then this isn't an issue. For government to interfere, which is effectively what this article logically ends at, would be absurd since governments are subsidy addicts.
Of course I remember when SMS first appeared and it was not expected to make it. It as obvious a failure as "home shopping" but suckers are born every minute! Yes, its on the control channel and yes, it costs less for a text message as to 'ding' someones phone so they got your number -- that later is free to do , of course.
In these days when 1Mbit/s is pathetic and 10Mbit/10Mbit is more what you need and what that costs, it doesn't take too much imagination to conclude correctly that SMS costs less to GSM than ARP to Internet Protocol. Duh, duh, duh.....
BillSF
Text is the biggest ripoff in Canadian telco history. The margins are nothing short of legalised extortion. The fact is that I cannot even send a simple net based e-mail to text a cell carrier unless I use a blackberry system. The cost of text communication to small business is ridiculous in Canada. If an independent company tries to get on the air and be innovative with services, the big three prevents them from entering the market with the help of the Canadian government.
This message was not sent from an iPhone because Peter Sellers really was a deviated prevert without a dime for the call
This makes me dream of the day when there is real competition in the wireless industry...
Keep dreaming. We won't see wireless competition because people don't really want it. What they want are cheap phones and phones that work anywhere. They get the latter as a result of market domination by a few corportions, and are willing to accept the hit on the former.
People like their toys and tools to be standardized. Look at the personal computer market. For everyone around here who rants about the evils of Microsoft, there are a dozen others who don't care because the dominance of Windows and one particular kind of hardware platform plays to their advantage.
The world is just one village.
-- Slashdot: When Public Access TV Says "No"
I don't know actual numbers, so let's be conservative.
Let's say the average customer sends 1 text per day, and all these texts occur during a prime 8-hour window.
(1 text/day) / (8 hr/day) / (60 min/hr) / (60 sec/min) = 3.47e-5 texts/sec/customer average
Now let's assume each message uses 300 bytes with overhead, and let's assume each tower handles 100,000 customers (conservatively):
(3.47e-5 text/sec/customer) * (300 bytes/text) * (100,000 customers) = 1041 bytes/sec
So with these insanely conservative numbers, cell towers only require 8 kbps bandwidth for text messages.
If a court compels testimony, only sometimes is it sealed.
Communications with Kohl's office wouldn't fall under this. A hearing in the Senate is sometimes secret, but mostly for military matters. Not in this case.
Kohl is pulling your leg.
I don't text and I don't accept text messages on my cell phone. I'm at a computer all day in my job, then again at night when I'm at home. I have voicemail for those times when I can't be reached by phone. If you have something to say to me that can't be said in person, by telephone, in an e-mail or via instant messenger, then maybe it doesn't need to be said. I can't think of an instance where texting is necessary so I don't use it. I guess I'm sticking it to the man by not playing into his scheme, huh? ;)
I am all for this information being put out frequently until the general public "gets it." There are a few bits like this -- for example, how evil the RIAA is -- the general public STILL doesn't even know who or what the RIAA/MPAA/BSA are! And yes, the public needs to know when it is being raped and abused. These are some pretty important bits of information to be sure. But I fear we need a "For Dummies" version of this stuff and then get it mentioned on CNN or in Consumer Reports magazine or something the masses will get some exposure to. Obviously, this will not get on CNN or any major news channel for reasons that should be painfully obvious.
We have, at our disposal, some really large amounts of information, but we lack marketing skills. It needs to be formatted in a way people can read and understand it. It needs to be presented and offered in a way that people will look at it. Consumer Reports is pretty successful at this and perhaps it should be copied. I wonder if there are any geeks with husbands or wives that work in the needed fields that could be utilized to this end? Surely there are some geeks that actually do have some ability in those areas as well? We have all the data, we just need it formatted for consumption.
The standard UK iPhone tariff includes 500 texts - after that they're about 20 cents (12p). But since it also includes pseudo-unlimited data, I can send as many emails as I like, complete with pictures. Most of my friends have iPhones too - so we send emails with pictures to each other all the time.
OMFG y r thy so mean? :-(
Politics will sooner or later make fools of everybody... - Dick Armey
How can they get away with that? I guess the other carriers do it too. IM is a free service offered by Yahoo, MSN and AOL and others. How does VZ get away with charging me to use a free service provided by a 3rd party? Why don't IM messages go over my data plan?
If I get a phone that runs Windows Mobile and install a IM client on that device, will it use the data service I'm paying for, or will Verizon somehow pipe those into their TXT network, too, and charge me extra to send "LOL" and ":)"?
Edith Keeler Must Die
I live in Sweden, I pay 0.69kr SEK (~9 cent USD) for each text message I send, and every third month there is no charge att all for texting. The only requirement is that I use services for at least 49kr SEK (~$6 USD) every month.
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While it is true that SMS is carried in the control channel of GSM [1] and that control channel has reserved bandwidth not available for voice call channels, it is also true that heavy SMS traffic will saturate this control channel and that some carriers have had to increase the control channel bandwidth in order to make room for the volume of SMS. You can observe the control channel saturation (and resulting inability to set up new calls, while existing calls continue fine) in any major city in the UK from around 23:45 on 31 December to 00:30 on 1st January. So the carriers do have to put a bit more bandwidth into lots of SMS.
However there is also an SMS messaging centre to operate, which is a pile of computers to route messages, as well as storage on each cell base station for the SMS waiting to be transmitted to the handset - rather like email it's too cheap to meter, except for all those mail servers you need to forward and store the email.
The profit margin on SMS is clearly huge (consider that bulk SMS rates are at most half the cost of single SMS out-of-plan from a handset in the UK) but it's not 100% profit and 0% cost.
And finally, think about spam: the reason you don't get much SMS spam (compared to email) is that it costs quite a lot to send SMS compared to email. If you make SMS as cheap as email, you'll make it as spammy as email, and you need to think about how to avoid that.
[1] I'm going to ignore CDMA here, I wish the rest of the world would do the same.
"For a successful technology, reality must take precedence over public relations, for Nature cannot be fooled"
I'm sure I remember reading a few years ago that sending an SMS costs you more per byte than receiving data from the Hubble telescope.
That's including the cost of building it, deploying and repairing the telescope!
Of course that was a few years ago so assuming that Hubble doesn't need any more repairs for a while it's getting even cheaper!!
How much would it cost you to send a text message without using any of their networks? I know that is the point, but the issue is that monopolies are ok now, when we have been told that the U.S. government will protect us from such bad things. I have no idea what the point of the AT&T break up was, maybe someone's wife cheated or didn't fix a race or something. This is the age old story of the rich lining the pockets of the rich and focusing on one related issue like this does little good.
FTA: "T-Mobile and AT&T contended in their responses to Mr. Kohl that the pay-per-use price of a message is relatively unimportant because most messaging is done as part of a package. With a $10 or $15 monthly plan for text messaging, customers of T-Mobile, AT&T and Sprint can effectively bring the per-message price down to a penny, if they fully use their monthly allotment."
Those bastards!!! The only reason most customers have a messaging package is because sending an individual message is such a f*&%ing rip off!! It's absurd to me that they think they can charge for something that's essentially costless to them, and an outrageous charge at that. Text messaging should be free perk on any cell plan. I hope congress nails these heartless douchebags to the wall.
Here's a thought: Maybe congress should make the cell phone companies bail out the auto industry.
...it out for themselves.
When you have such a large population that cannot grasps how much data gets transfered via a typically web page vs. a text message and the, so wide its a different world, cost difference to the consumer who lives in the same world as the suppliers...
Maybe the real issue here is level of education and skill at logic.
With this sort of ignorance, how else are the ignorant masses assisting the abuses to abuse the rest of us?
What really needs to happen here is recourse against this incredible abuse.
This is not a market issue anywhere near as much as it is an excessive profits abuse issue.
But even more so, its a level of knowledge problem for the population.
The cost involved in transporting text messages is not just the capacity in the network. These messages all end up on a SMSC, a carrier-grade system able to handle multiple-hundreds or -thousands of simultanious SMS messages and route them to other subscribers and operators. These systems are provided by a handful of suppliers that know what to charge for a decent cluster of these baby's... and somehow they need support as well! NB. Not in any way affiliated with telco's.
as long as it is proportional to voice usage
That's the reason for the pricing model. SMS has to be priced high enough to make sure its use doesn't grow faster than voice.
The telcos want to balance the profit they make from the use of both channels, voice and signaling, while being backward compatible and not having the expense of updating the protocol to use the data channel(s).
Correction:
For as long as I remember, texting has grown disproportionately to voice usage.
And itâ(TM)s full of idiots!
No, receiving calls/texts is free.
While there may be some price plans that allow for free incoming calls or free incoming text messages, the majority of US price plans charge airtime for incoming calls and charge the same for incoming text messages as outgoing - currently 20 cents per message.
You can also typically buy bundles of text messages, with say Verizon charging $5.00/month for 250 text messages (and other options as well)
Stupidity... has a habit of getting its way.
If you're using the IM client that came on your dumb phone, it's because it uses text messages for not only sending and receiving IMs, but also for IM controls like logging on and off. This is nothing new - you have been able to IM this way long before data plans and email were common things to phones. Back in the day this was uber convenient that you could log in to AIM from any phone that had text messaging. More recently, many phones now include a client front end that wraps the text messaging interface to appear like a regular IM client - on the back end though, it's still sending and receiving texts.
If you get a WiMo phone with a proper IM client, it will behave like a regular IM client and use your data plan.
I love the cry for "true" competition at the end there. Real believable!
When capitalism fails, it is because its not 'true' capitalism.
When communism fails, it is because it is evil.
... can just use PINs on their data plan instead. Because my g/f has a bb (who else do I regularly message?), I can get away with keeping the $5/month 200 SMS plan, just in case somebody else wants to SMS me every now and then.
You know, we sound pretty lame when we start talking about "insufficient competition".
At first, it was just "monopolies" that were bad.
Then we started talking about how cable and telephone companies, although competing against each other, didn't provide "enough" choices for consumers.
Now we're saying that seven four cell companies aren't enough competition for each other. And we point out as evidence that they're all doing essentially the same thing to rake money in hand over fist.
Don't get me wrong - I think that text prices are, from a consumers point of view, stupidly high. But it sure doesn't sound like adding more companies to the mix is actually fixing the problem.
So perhaps the problem isn't them.
Perhaps the problem is us.
I was an exchange student in Finland back in '96. This was when *nobody* had a cell phone in the US. Shortly before I left for Finland, my sister and I were in a shoe store. We heard a guy walking down the isle talking to himself, and we both looked nervously at each other, because we were about to encounter an obviously crazy guy. Turned out he was on a cellphone.
:)
Anywho, when I got to Finland, everybody in the high school had a cell phone. Well, almost everyone, and if they didn't have one when I got there, they got one that year. And the thing was, *they texted all the time, because it was cheaper, much cheaper, than a voice call*.
Flash forward five years to the states, and then everyone is getting cell phones, but *without text service*. And now, text service is something that costs per text, or something ridiculous like that. In Finland, and I would guess most of Europe, you get some ridiculous amount of texting included in your plan, or you just have a straight-up bandwidth plan, which covers voice, text, media, etc.
I wish Americans would travel a little more often, to see how the US is becoming a technologically backwards society. Technological improvements which are more efficient are seen as opportunities to gouge customers, instead of compete and offer lower prices. The same thing was going on with banking about five years ago. American banks were charging fees to have people access their accounts online, while Finnish banks were giving it away for free, because then they didn't need to pay tellers. Oh yeah, and you could pay your bills and do banking by text service.
Computers are useless. They can only give you answers.
-- Pablo Picasso
It is my understanding that in Europe you pay nothing for incoming calls, but twice as much for outgoing calls as in the US. The same for text messages. Not sure how landline -> cell calls are charged (if at all).
Don't call me back. Give me a call back. Bye. So yeah. But bye our, well, but alright we are on a shirt this chill.
I believe that texting is part of the profit model that helps keep cellphones themselves affordable/free. By adding a recurrent charge the customer slowly pays back the loss of giving away the phone. I am not saying they arn't fleasing us, just saying they have a defence.
"Texting is the closest thing to pure profit ever invented" - Sir Chris Gent, founder of Vodafone.
"I bless every day that I continue to live, for every day is pure profit."
I think you need to change plans. There are plenty of carriers in the US that don't charge for incoming anything.
I pay $5/mo for something like 500 IM's and TXT's. In fact, I don't even know the number because I've yet to hit it.
There is only so many text messages you send a month and lowering the price really won't change that. However, if they raised the price from $5 to $10 a month, I'd probably cut back on the plan. In other words, I think they found my sweet spot :-)
Note: I am not 15 years old, and 15 year olds probably change this picture quite a bit. I'd imagine a 15 year old kid might push the upper bounds of even a 5,000 message a month plan. They dont pay the phone bill though, they bear the costs of text messages via punishment when they go over whatever their folks pay. Maybe you should look at the supply/demand curve for kids who only indirectly bear the cost of text messages.
It is my understanding that in Europe you pay nothing for incoming calls, but twice as much for outgoing calls as in the US.
What I believe happens is that the airtime is assessed to the caller. Since metered service is typical even for a call to the house next door, all they have to do is increase the per-minute rate.
For an example, take a look at Vonage's international rates from the US to the UK:
http://www.vonage.com/intrates.php?keyword=united+kingdom#list
To the UK, it's normally 4 cents a minute (free if you have an unlimited plan). But, if you are calling a mobile phone in the UK, it's 34 cents a minute.
In France, it's 4 cents a minute vs. 21 cents a minute.
In Germany, it's 4 cents a minute vs. 31 cents a minute.
You can check the rates in other countries if you like, but I think you get the idea.
Have you looked at your phone bill? At lease on AT&T those "IM" messages seem to be converted into some kind of SMS message and sent through what appears to be a gateway. I originally thought like you probably do, they are actually TCP/IP packets leaving your phone. Then I looked at my SMS usage and found lots of messages to a couple of numbers and then it dawned on my the IM stuff goes through a SMS gateway.
No, apparently you failed economics.
I wish condescending and arrogant comments like this were not mod'ed up. As folks who responded to that post pointed out, that individual who made that comment apparently didn't do too well in economics himself.
And "If there is sufficient competition in the market profits will be driven to zero and the price of the service will approach the *actual* cost of providing it (which is close to zero, apparently)." - in theory. That is something for the economists to ponder and to teach to their undergrads. In reality, that is far from the truth. No rational producer of anything will stay in a business until profits go to zero. Most businesses will bail out of a business when their margins go below a certain threshold. As a matter of fact, I know an entrepreneur who will not stay or go into a business that has margins below 45%.
Economists are still figuring a bunch of stuff out and most of the time their theories do not match reality. For example, economists assume markets are rational. As we have seen in the last year, they are far from it.
"Much more data is sent with an SMS that just the text of the message. How do you think you get the caller id of who sent the message? To see how much data is actually sent check out the format of a âoecall detail recordâ. [cisco.com] Most data is not compressed, but rather sent as a comma separated list. You would be amazed at how much data is actually tranfered for any type of wireless communication. First the message from the sending device is sent to the nearest cell tower, which contacts a database to see which carrier you subscribe to. (Your phone does this periodically also, so your carrier knows which cell tower service area you are in so they know where to send your calls). The number you are calling is looked up in a database so they know which cell tower to broadcast your message from. Plus your IMEI,ESN, calling number, called number,originating and terminating cell tower information, originating and terminating switch and trunk data are transmitted with each message. Copies of each record are reformatted and sent to the carrier for retention, copies are sent to the billing company and the company that maintains the carrierâ(TM)s customer service web site, etc. My point is that much more data gets transferred for each sms than the 160 characters of the text. Considering all the data transfers required for the whole process, the text of the message is actually a very low percentage total data processed. â
somethings are best left unsaid , I am one of those things
While there may be some price plans that allow for free incoming calls or free incoming text messages, the majority of US price plans charge airtime for incoming calls and charge the same for incoming text messages as outgoing - currently 20 cents per message.
WTF? Does that mean the US telcos are double dipping?!
In Australia, depending on the plan, text messages generally cost around 10 to 20 cents to send. The receiver never pays to receive an ordinary call or sms. (There are exeptions for premium rate services though).
By reading this signature, you hereby agree with the content of the above comment.
Landline telcos have been doing something similar for years! Look at your bill, you'll see a charge for "touch-tone" service. If you want to use pulse dial, that is free! The rip-off is, pulse dialing actually costs the telco more, since the pulses have to be converted to....TONES! This way, the digital switchgear can route your call. Conversion=cost! But you use tones and pay for it!
How many participants in an industry do you need to have before you'll say that the goal of competition has been met? Four seems like it would be enough. If there was some advantage to be had by using a price structure that accurately reflects the true cost of text messages then I suspect one of the carriers would have already tried it.
This conclusion requires no knowledge of control channels.
Back-of-the-envelope calculations with assumptions wildly skewed in favor of the telcos (512 byte texts, 8kbit/sec voice calls) indicate that individual 20c text messages are billed at roughly a 100,000% markup as compared to the retail cost of voice-grade data transmission ($20/mo for 700 mins).
And yet Verizon is too stupid to give me 5 free text messages a month to smooth out the mountain of insanity between no text messages and enough to justify a monthly plan. At 20c/ea, there is no chance whatsoever of me getting into a texting habit. Instead I have disabled texts entirely.
There's an awful lot of arguing here about texting vs. voice comms, and which is more obnoxious or intrusive.
But nobody seems to notice that texting is really just email sent to a phone rather than a PDA or PC. So what's all the hubbub about, anyway? Just accept the fact that people (many, not all) want a combination telephone (voice) and email tool (texting), and move on.
https://app.box.com/WitthoftResume Code: https://github.com/cellocgw
Can someone tell me why people pay per text message still? Verizon doesn't charge me per txt regardless of how many I send or receive or who I send them to and who their provider is. I'll admit, it's wrapped up into my $99 data/phone plan I have. But still, if people are worried about getting charged out the wazoo because they like to text people, get on a plan that includes unlimited text messages.
WTF? Does that mean the US telcos are double dipping?!
Well, you have to understand the differences in evolution in telephone service. Traditionally in the USA, local phone calls are unmetered. That was never the case in Europe.
When the first radio phones started coming out(they weren't cellular yet), ALL calls were metered because you were paying for relatively expensive limited radio transmissions. Because such people were relatively rich, and didn't want to discourage calls too much with getting the equivalent of a 900 number, they accepted the charges.
Think of it as the tradition is that the owner of the cell phone pays for the radio transmission costs, outgoing or incoming. Thus the reason you get charged minutes for incoming as well as outgoing calls.
That's not to say that the charges for text messages aren't crazy. It's one of those things that I wouldn't be surprised that there's more bit traffic to charge for text messages than to send them. More expense to bill for a text message than to send one, etc...
I don't read AC A human right
Muckraking again, I see.
I don't understand why, but that is the way it works here.
It's simple enough - you're paying for the radio time associated with your phone. It mostly stems from the 'local calls are free' tradition. Back in the days before cellular phones, when only doctors and stock brokers had them, they didn't want the equivalent of 900(extra charge) numbers, so they picked up the radio tab. That continued on into the cell phone age.
Doesn't mean text messages aren't profit gold for the cell companies. Part of the reason I don't use them.
I don't read AC A human right
Who cares about the "actual cost"? Do you think you pay anything close to actual cost on your software, designer sneakers, or iPod Nano?
Companies need to make profit somewhere, so why not with texting? And it's not like you end up having to go to the poorhouse. You can get an unlimited texting plan fairly cheap, or you can run an IM client on your phone with an unlimited data plan.
Would more competition be good? Of course. But who do you think is going to make the investment to put in another set of towers across the country? Four carriers is actually pretty good.
This could be a killer app: Mash texting. Low bandwidth, not real time, no providers needed.
No, receiving calls/texts is free.
While there may be some price plans that allow for free incoming calls or free incoming text messages, the majority of US price plans charge airtime for incoming calls and charge the same for incoming text messages as outgoing - currently 20 cents per message.
You can also typically buy bundles of text messages, with say Verizon charging $5.00/month for 250 text messages (and other options as well)
20 cents per message???
I live in Argentina and 1US$ ~= 3.4AR$, and each text message costs around 10 argentinian cents depending on the carrier, so in our currency, you are paying 68 cents the message, 6.8 times more O.o
That's a huge ripoff, it's already a ripoff for 10 cents in my opinion... the bundles are more or less at the same price, always depending on the carrier.
Bye,
Sicarul
I agree that texting should be cheaper, but the article logic is flawed.
- if the price goes down, text usage will go up proportional to voice usage, so it's not a matter of "oh, they'll just install the extra infrastructure anyway".
- how many times have we heard the news "SMS network collapse in some 3rd world country after some nation wide event that requires texting"? Somehow, "trillons" of messages sounds hard to believe.
--
Stay tuned for some shock and awe coming right up after this messages!
That's crazy - here in the UK texts are (and always have been) free to receive, as are calls, on *any* network. There'd be rioting in the streets if any of the networks tried to charge for incoming texts / calls.
Anybody just remotely familiar with technology should have long been able to suspect SMS to be near free as far as the provider backbone goes ...
In Germany, text messages were free when they started out ... until the providers noticed they were sitting on a gold mine ...
At least in Germany, receiving text messages is free ...
I suspect that once data services catch on with a larger base, many people will move from SMS to email, increasing network load and lowering profits for providers ...
When's the last time you saw a vertical industry go horizontal without being forced to by the government?
In the past, I ran a fairly large network. If everything was fine, we could receive almost no text messages. If, say the uplink to a facility went down, we could get text messages for every server and service in that location. Our monitoring didn't have dependencies configured into it, so the simple fact that the monitoring server could not reach those other servers was cause for a page. It would have seemed like a good idea to let a single page go out saying "this uplink is down", but it brings the sense of urgency to it when you get 100 pages. It also makes it apparent when you're with someone and say "There's a big problem, I have to go", rather than saying it to one page and they wonder if you're just blowing them off.
Some months, I would get maybe four pages throughout the month. Some months, it may thousands. The providers loved me. In all that time, I never SENT a text message, so they were all incoming. We always paid more for the plans that allowed for at least 3,000 text messages. Our message was always very short, not just for the sake of a text message, but so it would fit on the screen well. They would read something like:
"www1 HTTP DOWN for 5 minutes"
"www1 HTTP STILL DOWN for 35 minutes"
"www1 HTTP back UP after 46 minutes"
"NYC1 ICMP DOWN for 5 minutes"
"NYC1 ICMP back up after 8 minutes"
You get the idea. Lots of short concise messages.
We even had to shop around with various providers to determine who's service was fastest. A 15 minute delay, which in the case of a high profit site is huge. I love the blackberry network for this. My delay has been anywhere from 5 minutes to 3+ hours. When I'm on the road, and there is essential timed information that needs to be shared, I have people mail me at gmail, and check it from the phone. That actually comes in as expected. :)
It's nice that they want to make a profit. I'm surprised they don't try to squeeze every dime out of it, and charge for the "air time" required when the tower and phone talk to each other too.
Serious? Seriousness is well above my pay grade.
The point is EVERYONE is being screwed by the telecoms companies, but no slashdotters just flame people who use texts.
This to me sums up slashdot.
I almost never text anybody from my phone. I'm on my computer so much that I just pull up my email and email a friends cellphone as a text message. It costs me nothing.
"During My Service In The United States Congress, I Took The Initiative In Creating The Internet." -Al Gore
Sorry, this overcharging for text messages is a marketing strategy, not an engineering or scientific discovery. Overcharging wouldn't even meet the minimal standards of a business methods patent.
There's no "trade secret" here, unless you consider Bernie Madoff's ponzi strategy a trade secret.
The whole thing is a pile of carp, and the individual state regulators and rate setters are just not doing their job. Time for Senaturd Kohl to come clean with the people he alleges to represent.
This has always been the case in Russia, though, but we don't pay for incoming calls & messages, either. We used to, but a few years ago the government intervened and mandated all cell providers to not charge for incoming (forcing them to strike up agreements to redistribute the payment to cover expenses on both sides in cross-network calls).
I take cancellation calls calls for Sprint. Business is good because Sprint customers have been dropping like flies for the last couple of years.
I see it over and over and over. Someone gives a phone to their 15 year old, no one bothers to discuss a text plan and the first bill comes with several hundred dollars of text charges. Sometimes the customers calls me and threatens to cancel and we adjust all of the charges minus the cost of the text plan. But very often the consumer pays the bill because they don't know that the threat of canceling will get the charges adjusted. So that's hundreds of dollars of free money for the phone company. That's a shitty business model because in exchange for the free money they lose any goodwill they had with the customer. A couple of hundred dollars extracted from a customer who now hates you. And imagine the family fight between the 15 year old and her parents. I've heard them screaming at each other in the background while I take the cancellation call. I hear it all the time.
The cellphone companies have been doing this for years. It's called overage, or from the carriers point of view, free money. In the early days of the cellphone business capacity on cell towers was precious, so overage charges were necessary. Now days the networks have huge excess capacity, but they still charge overage because it's part of their business model. It's just easy money off the suckers who don't watch their usage.
The phone companies know that their onerous billing practices cause customers to hate them. But they are addicted to the ARPU (average revenue per unit). In Sprint's case, the company is broke, completely drained by it's failed buyout of Nextel. Now, with the economy tanking and their credit rating junk, Sprint can't borrow money. I think the CEO is a good man who would like to do the right thing and cap text charges at a reasonable price. But they have to have the money and they can't afford to cap these overage charges.
Now is the time to write your congress critter about cellphone company billing practices. It's time to impose some common sense government regulation. As Wall Street and Bernie Madoff have shown, you can't always depend on business to do the right thing without regulation and oversight.
"WTF? Does that mean the US telcos are double dipping?!"
No, it is just a different model.
In the US/Canada, calling a mobile vs. calling a landline is the same price (often unmetered or very cheap). In most cases it costs just a few cents a minute to call anywhere in the US, landline or mobile, usually including Alaska and Hawaii. Some packages even extend that to Canada, and western Europe (non-mobile in the latter case).
That is not the case in Australia, the caller to a mobile is usually charged a hefty surcharge. Take a look at your international calling rates, you will see no special mobile rate for calls to the US. It is all the same rate, there are no special mobile area codes (a.k.a. city codes).
In many cases, you can even transfer your home number to a mobile if you are eliminating your landline.
One could argue which concept is better, fairer, or whatever. As with Australia (and almost everywhere) it really depends on the package you get.
The only athletic sport I ever mastered was backgammon - Douglas William Jerrold
I know I might be dating myself but I see many similarities between texting and the CB radio craze of the 70's.
1. There is the use of the arcane abbreviations used in texting. This is similar to the stupid use of the "10 codes" which was insane.
2. The CB radio fad was expensive to get all of your equipment but once you had it, was cheap to operate. Texting is cheap upfront but very expensive to send messages. This having been said, both are expensive.
3. Many people just have to be on the bandwagon. Like CB radio, I think texting too is just a passing fascination.
Why would you want to use a form of communication that is not as expressive as speech (which has millions of years of evolutionary development). Yes speech is synchronous but for non-synchronous communication, a cheaper alternative is email. For these reasons, I believe texting will not last long.
You can also typically buy bundles of text messages, with say Verizon charging $5.00/month for 250 text messages (and other options as well)
For an idea of how ridiculously overinflated text messaging charges are, at 0.10 per message, sending a 3mb mp3 would cost almost $400, to each party.
Text messaging pricing schemes are not based on actual costs. It's just a way to get more money from customers by selling (less)overpriced messaging packages.
...that costs me nothing, you are still willing to pay me for it? Hmm... "feckless youth" indeed. Witness the miracle of the sucker. P.T. Barnum's "there's a sucker born every minute" surely applies here.
I lived in Korea for a year in 2003-2004. I picked up a used pre-paid cell phone for $30. I then spent approximately $8.50 (or 10,000 Korean Won) per month to keep it charged. It included free text messaging, free incoming calls, toll-free numbers were still free, and if I used a calling card to call back to the United States, it did not eat my wireless minutes.
So... the only time I actually used my cell minutes was when I called someone else in Korea.
The problem SMS faces is that in a few years it'll be completely replaced by instant messaging and push email.
If you want to stick it to them, find clever ways to get voip over 3g networks, ideally tunneled over secure connections. They fuck the consumer over, as a consumer it's your responsibility to fight back.
When I see the word 'text' bastardized into a verb, as in 'texting', I am reminded that life is too short for most bullshit and I move on to another story/topic/conversation/channel/webpage, etc. (with the exception of this /. story I've already wasted 30 seconds too much on).
It's a tech fad that dumb people get sucked into. The carriers have found a way to separate fools from their money. This is news?
I'm currently on T-Mobile, paying about $80/month. I get: 300 Minutes (unlimited Night/Weekend/Fave 5) Unlimited Text Unlimited MMS Unlimited Web usage Insurance on my phone. I hear people keep complaining about the price of the single text message. Either block text messaging through your service provider (its a really quick 5 minute phone call to make sure you cant send or receive texts), or get an unlimited plan. I do agree that the price of text messaging is too high to begin with >.>
To the UK, it's normally 4 cents a minute (free if you have an unlimited plan). But, if you are calling a mobile phone in the UK, it's 34 cents a minute.
In France, it's 4 cents a minute vs. 21 cents a minute.
In Germany, it's 4 cents a minute vs. 31 cents a minute.
Here it can depend on cell phones because there's a lot of services that charge a flat rate for X No. of minutes. Both parties can be charged when you call mobile to mobile. Charges can range from free (if the person is on the same network or in a network of friends) or the individual rates. IOW, you're charged depending on your plan, they're charged depending on theirs. In my case I prefer the pay-as-you-go plan. If you don't call all the time it works out pretty economically. On my cell plan, for example, I pay $1 a day on the days I use it and 10 cents a minute to anywhere or 0 if I call another member with the same service. I spend about $150 a YEAR. While fixed minute packages may run cheaper per minute, Being that most run $40/month for the cheaper packages, it's a lot cheaper for me to do the pay-as-you-go and I don't have to worry about running over minute limits.
If you have a land line, it doesn't cost you any more to call a person's cell phone if it's a local number. It does cost the cell phone owner as stated above. However land line companies also compete with cells by offering a flat rate per month cost for both local and long distance, usually around $50/month.
Our biggest cell problem in the US is coverage. It depends on where you are as to which service has the best coverage.
Regarding the texting, it should be obvious: The price is high, not because it taxes the systems more, it's because texting is popular. How is this surprising? When something is popular or needed, the price goes up. When it's not, the opposite is true. This popularity allows the telco's to rake in additional profits and offer package deals with a guaranteed income. Sorry, but a company is not require to responsibly price things according to their cost. If you want texting prices to go down, then texting needs to become less popular or more competition needs to come in that offers cheaper or included texting.
If you've never been modded as "flamebait" or "troll," you've never tried to argue a minority viewpoint here!
No, apparently you failed economics.
If there is sufficient competition in the market profits will be driven to zero and the price of the service will approach the *actual* cost of providing it (which is close to zero, apparently). The fact that text messages cost 1000s of times more than they should indicates that there is insufficient competition in the industry, excessive barriers to entry into the market, etc.
And if you took some basic finance courses and paid close attention in your intermediate economics, Salaries are considered costs, so you could jack up salaries and make zero profit while people at the top walk away with 100 million in salary : )
Creative accounting makes economic measurement of real firms via "profit margins" quite hard, nay impossible, without regulations which no sane legislators will introduce because their "campaign contributions" will go away.
VLC FOR MAC IS DYING! IF YOU DEVELOP, PLEASE SAVE IT!!
in South Korea, incoming anything, voice or text, is always free.
outgoing text messages are about 20-30 won each (2 or 3 cents US).
now that I'm back in Canada, I hear that incoming texts are 20 cents each. WTF? I don't understand how North American companies can get away with such terrible prices and terrible service.
-I only code in BASIC.-
How is it sobering when it makes me want to drink?
"Give orange me give eat orange me eat orange give me eat orange give me you." -Nim Chimpsky
My parents, when they report back from Asia, always tell me that their text messages are included for no extra charge. They also say that the North American handsets are about 10 years behind the Asian models in terms of function and price.
I really hope cell phones cause cancer...
"WTF? Does that mean the US telcos are double dipping?!"
No, it is just a different model.
Don't you mean: "Yes, but it is also a different model."?
Experience teaches only the teachable. -AH
Traditions are just a way to keep stupid unfair standards so they can benefit from it.
The original AT&T Wireless, before they merged with Cingular, charged only for sending texts. And the original AT&T Wireless subscribers kept their plans under the new Cingular name. However, Cingular charges for both incoming and outgoing texts, and that's where AT&T Mobility LLC (the 2007 merge) stands today.
Yes. Not sure about the US, but in Canada they used to charge for outgoing texts only. Then someone had the brilliant idea that they could charge for incoming ones as well....
I'm just waiting for my provider to do the same thing. That sounds like a major breach of contract to me. Thank you very much for the heavily subsidized iPhone that is now contract free....
There is a reason popcorn and a coke at the movies cost $10 more than it should. Would you rather your movie ticket be more even if you don't want the food? How would a cinema stay in business if they did this while others didn't?
I prefer my cell bill to be lower when I don't want SMS.
Economies of scale: South Korea has 493 people per square km.... Canada has 3.2 people per square km.
SMS was just a stopgap service before they started Internet-enabling phones. Now that most new phones support e-mail, why bother texting? E-mail is cheaper and can use the same interface.
In the case of Australia, every call includes a hefty surcharge. Its now cheaper to call New Zealand, the US or Canada on nearly every plan on offer than it is to call a different city in Australia.
When it comes to voice calls, then no, I wouldn't consider they are double dipping. However, when it comes to text messages they really stick it to us with a ten-feet old-school telephone pole and no lube. Not only you pay $0.20 to send one, your recipient pays $0.20 again, to receive it. And they make it hard or impossible to block incoming messages. So if you have a bunch of dumb-ass or malicious friends with unlimited texting plans, they can really run up your bill.
It is all geared to push people to pay $15-$20 for unlimited messaging
If con is the opposite of pro, is Congress the opposite of progress?
In the states, they don't have a 'mobile phone' area code like we do in Oz. If you buy your mobile phone in California, you have a California number.
Therefore in the States, when you call someone's number you have no way of telling if it's a mobile or not. Therefore the extra cost goes to you, the mobile user.
It's exactly like global roaming. You pay when people call you because they don't know they're triggering an overseas call.
but Canadians are not equally spread out across the continent. about 90% of the country is open land where no one lives, and there would be no need for cell towers in those uninhabited areas. people in the far north uses satellite phones, because there are no towers up there.
Canada has 3.2 people per square km.
Australia has a population density of 2.6/km2.
texting costs them 20 cents each, not 40 (20 to send and 20 to receive.)
if economies of scale are the cause, why is Australia cheaper than Canada?
we are still being hosed.
-I only code in BASIC.-
If you spend $150/year, and you're paying a $1 fee on the days that you use the phone at all, it seems to me like you'd save a lot of money going with another prepaid phone. I have a Virgin Mobile phone, and I spend $5/month because I have it auto-pay via my credit card. I could go lower if I switched to another phone. (I keep it mostly as an 'emergency' phone. I realize that unsubscribed phones can call 911.. I mean that as well as calling AAA if necessary or very rare other calls.)
A site that compares a ton of different prepaid phones is http://www.cellguru.net/prepaid_compare.htm (I have no affiliation with the site).
many biz on this world costs nth
but earning
that's why bombing
I'm not about to pay some 2x 15 cents so that the phone company can shuttle one under 256 byte message to my sweetie. What we did was get a pair of Google HTC G-1 phones and we use the IM app to "text". Not only is it faster, but there is no additional cost to sending each message. The transport (at least for google-talk, which is what we use) is your basic IP, which is billed at a flat rate of ~$25/mo.
Is it possible to have a P2P-like network for SMS, cell phone, and 3G data (at least in an urban area)? For example, I have a wireless server at my house, is there a way to network the other wireless servers in the neighborhood in such a way that the now neighborhood wide wireless network could serve as a cell tower? The ultimate implementation of such a network would mean that, at least in urban areas, we the consumer aren't so dependent on a few carriers that are currently price gouging.
If you download the official AIM client for Windows Mobile, it acts as a proper IM client and goes over TCP/IP, not SMS.
General release
Latest beta
It's been working fine on my Tilt for those times I need it.
Indeed.
However, in the UK it costs 10p (15c) to send a text message with no cost to receive.
In the US it now costs 20c for both sender and receiver, 2.6x more expensive.
It is my understanding that in Europe you pay nothing for incoming calls, but twice as much for outgoing calls as in the US. The same for text messages. Not sure how landline -> cell calls are charged (if at all).
In the US, landline->cell is free to the landline owner, but the cellphone gets charged at the same rate as it would in any case.
Disclaimer: The opinions and actions of the US Gov't are in no way representative of those held by this author or its ci
Huh? It must be a problem with your BES server or your carriers connection to the BB network because the absolute longest delay I have ever had with an email on my BB is about 15 minutes and that could have been our relay being overloaded with spam. In fact I generally get messages on my BB before the Notes new mail notifier goes off in office profile.
There are 4 boxes to use in the defense of liberty: soap, ballot, jury, ammo. Use in that order. Starting now.
Not only that, we also pay for receiving spam texts unless we contest them (then contest them again because they don't do the "paperwork" right the first time... on purpose).
That is not the case in Australia, the caller to a mobile is usually charged a hefty surcharge. Take a look at your international calling rates, you will see no special mobile rate for calls to the US. It is all the same rate, there are no special mobile area codes (a.k.a. city codes).
In many cases, you can even transfer your home number to a mobile if you are eliminating your landline.
One could argue which concept is better, fairer, or whatever. As with Australia (and almost everywhere) it really depends on the package you get.
I live in Uruguay (South America), my brother lives in Canada (North America in case you don't know :P ).
I have a U$ 12 plan that lets me make up to eight hours' worth of local calls, or a bazillion text messages. However, if someone calls me from a landline, he incurs in the very hefty surcharge (about half a dollar per minute). Calling from a cell phone to my cell phone is almost free if they are from the same company. However, calling to a cell phone from another company is quite expensive.
To boot, I can call for about an hour to Canada with my U$ 12 plan, so I usually use up my spare minutes at the end of the month by making a call to my brother.
On the other side, my brother has the exact same cell phone, but he has a plan from Rogers, the Canadian communications company. He's often charged upwards of U$ 100 for a MUCH worse plan. To boot, he never calls me because he believes that the international call rates from Rogers are very expensive (to be honest, I haven't checked).
I guess the US style is similar to the Canadian, so I think you're getting the short end of the stick. We always complain about our state-run cell phone company over here, but in my experience, we pay ten times less on average than in the US or Canada (to be fair, we earn ten times less too!!)
There are three kinds of lies: lies, damned lies, and statistics.
... SMS messages at 12:01am on 1 January still take about ten times longer to reach their destination than at other times of the year.
If it's not, as I had always assumed, the networks being overloaded with send-to-all-in-address-book Happy New Year messages, then why is it?
"Nine times out of ten, starting a fire is not the best way to solve the problem." - my wife
Traditions are just a way to keep stupid unfair standards so they can benefit from it.
There's a solution, you know. Start your own cell phone company and steal customers on the basis of not charging for text messages.
I don't read AC A human right
I have a solution: fuck text messages, fuck cell phones.
If you want to send messages, get an internet phone with skype.
No its not obvious... supply and demand economics, right? Well, the demand is high, but the supply is essentially infinite as TFA points out. N/infinity = zero for extremely large values of N. Therefore it should be practically free. What we are looking at is a price-fixing scam.
"This makes me dream of the day when there is
real competition in the wireless industry, not this gang-of-four
oligopoly."
Oh boo-freakin'-hoo... in my country there are only two telecommunication companies and they merrily screw every last one of us. 4 or forty won't make a damned bit of difference.
But the European way is correct - as a receiver I have no choice - I can not say: I don't want Mary's SMS any more. I receive them no matter what and if I had to pay as well I would be double upset.
And they make it hard or impossible to block incoming messages. So if you have a bunch of dumb-ass or malicious friends with unlimited texting plans, they can really run up your bill.
My almost very first thought when I read about the pay-for-receive. Only difference: I thought "SPAMer" instead of "malicious friends".
Martin
Yes, thanks AT&T(Cingular) for billing me $800 in two months a few years back for text messages. That was before they had "unlimited" text messaging, but I learned the hard way.
This whole 'pay to receive a message' lark must really be stifling innovation out there. We have loads of cool services available that use SMS as the notification method for things like travel, payment reminders, etc. I don't think many of these would exist if we had to pay to receive those messages.
North Americans are being fleeced by having to pay for incoming anything. Almost all of the rest of the world employs caller / sender pays regime and it is MUCH better! I've used both.
Only boring people are ever bored.
You clearly have no idea how supply and demand works. When demand exceeds supply it creates a shortfall, and prices go up due to the scarcity of the good in question. That is, you may be willing to pay $X for my widget, but someone else who wants it is willing to pay $X+1, so if I only have one I'll sell to him instead of you. Conversely, if I have three, I'll sell to him first, then you, then maybe to another guy who is only willing to pay $X-1. The average price drops, and as people realize that I have a bunch of widgets I want to unload, they know they can get them for less if they hold out, and consequently are willing to pay less money for them because they know that they will still be able to get one even when I've sold to everyone who is willing to pay more than they are.
Now that you've gotten a quick economics lesson, you should see why simply having an infinite supply of something doesn't make prices magically fall regardless of demand. Prices are set by what people are willing to pay for them (you may have heard the term "what the market will bear"). Supply and demand changes affect that price, but it's not the only factor. In this case, there are only a few companies providing the service, creating an oligopoly. They are going to set the price for text messaging based solely on what they think people will pay. If they set the prices too high, people will stop using the service or go to a competitor who offers a cheaper alternative. Yes, it's "price fixing" in the sense that each of the providers is setting his price at the level he thinks will provide him the most profit. If any of them were to lower their prices significantly, the effect would likely be to attract a large number of subscribers away from other carriers. Each of the carriers knows this, and so if one of them lowered the price all of them would have to in order to retain customers. The net result is that they simply all make less money. Since they're not forcing anyone to use their services, is making money really so wrong?
Prices are likely to drop eventually anyway, as the market grows and competition increases--not just from other cell providers, but third party solutions that replace the SMS system entirely. Witness the growth of iPhones, BlackBerries, and other smart phones that give people access to new ways of communicating every day. Within our lifetimes, SMS will be a distant memory. Especially given that this is a completely superfluous luxury service used mainly by people who can well afford it, it's hard for me to work up a whole lot of outrage about companies making a profit while they can reasonably do so.
From TFA:
"But text messages are not just tiny; they are also free riders, tucked into whatâ(TM)s called a control channel, space reserved for operation of the wireless network."
This is VERY biased and short sighted comment on so many levels.
Some examples:
1) It totally overlooks the required *dedicated* nodes in the Core Network. These nodes dont come for free, don't have infinite capacity and do not maintain themselves.
2) The article calculates with 160 bytes. This is the actual payload. Protocol overhead in several parts of the network is a very high. Depending on where the originating party and terminating party of the message are, the network may also see a single message twice (SMS is NOT peer to peer).
3) I am not sure for GSM, but at least for UMTS there is no such thing as an "always on" control channel in the Radio Access Network on which an SMS can "piggyback". A handset that has no activity like a speech call usually has NO control channel. For both originating and terminating an SMS, a dedicated control channel is set up. This dedicated control channel is not "free", is not using "reserved capacity" and competes with e.g. speech calls when resources are low in a cell.
Sure the prices may be too high. But this article is just nonsense.
Norway has 12 per square km, and a population of only 4.8 million. We don't pay for incoming calls or SMS.
God: An invisible friend for grown-ups.
If you think that the situation is bad in the US, you haven't seen nothing. It is truly outrageous here in Canada to the point where some people will find a way to get a plan from the US and use it here. Get this: most carriers here will even charge you to receive calls. You heard that right. Yes, you will pay to receive a call. I had never heard of such a thing before moving here.
What about spam received by SMS? I wouldn't want to pay for all the crap I receive in my e-mail box...
I'm really not surprised by this. When I worked for SunCom (AT&T) Wireless years ago, the sales reps would show people how to get FREE weather, stock quotes, etc., from MSN Mobile. Once upper management got wind of it they had the enginneers create their own version of this for everyone and charged them $12.00 a month for it. The same service but with a charge to it. Within a year, instead of touting the free stuff available out there, they were marketing the SunCom branded version that was giving them the same thing that is available for free. Text messaging is simply nothing more than a glorified quick mail system. Typically most carriers throw that into your phone package for free, yet many pay an additionaly amount to text message. While its much more convenient, most carriers provide free e-mail which in itself is pretty much the same thing, however it's not as "convenient" as the little sms messenger. I was told by some of the engineers, that in the Wireless world, if they can find a way to measure it, they will charge you for it.
Wow. Quit sleeping through your econ classes.
Charging 3 different customers different prices for the same product is called discrimination. Great if you can get away with it (sometimes called a senior citizen or student discount), but not how most businesses operate.
The grandparent was correct, and you pretty much agree with the post in your second paragraph there. Text message market should be in perfect competition. Text messages from Sprint are exactly the same as those from Verizon, they are perfect substitutes. In a correctly functioning market, market forces will push commodities with perfect substitutes down to the marginal cost. Marginal cost is the price it takes to create the last widget, or in this case text message. As per the article, text messages cost almost nothing, therefore, the price of text messages should be almost nothing. The fact that this is not the case indicates that the market is not functioning correctly.
Thanks for that. I am pretty unhappy with my new Motorola KRAVE (for reasons beside SMS or IM) and will return it before the 30 days are up. I was considering a WiMo phone instead. If that doesn't satisfy me, I'll keep my trusty old LG VX8300.
Edith Keeler Must Die
In Europe the calling party pays for the call (similar to how the US handles (d) long distance on land line phones). If you are receiving the call you generally pay nothing. In the US, the cellular customer pays for the airtime of sent and recieved calls. In both, typically calls to in network lines are provided at a reduced rate. It's generally imposible to find a calling party pays plan in the US or a cell pays airtime plan in Europe. Different markets and different standards of doing business in both places.
Degaussing scares the bad magnetism out of the monitor and fills it with good karma.
That texting is "free" (or so close to free that even the greatest mathematicians can't tell the difference between its cost and zero) isn't a secret. Even within the mainstream, I mean.
What the carriers really don't want, is for you to be even thinking about this, or wondering if there's an alternative to using them. As soon as you start to wonder what it costs, you already hate them, because you don't really have to research it or wonder very hard, to know that the bandwidth required by half-duplex latency-uncritical text is insignificant compared to the demands of voice.
"Believe me!" -- Donald Trump
While there may be some price plans that allow for free incoming calls or free incoming text messages, the majority of US price plans charge airtime for incoming calls and charge the same for incoming text messages as outgoing - currently 20 cents per message.
About a year ago I had to call up my phone company (on their 800 number, so this part at least wasn't costing me) and yell at them for about two hours to get them to reverse the charges for incoming text messages that THEY SENT ME .
For a period of about a month (at the end of which I flipped when I saw the charges) they were sending me about 100 text messages per day advertising their own stuff. My phone doesn't ring for texts from anyone I haven't set it to ring for and it sorts the messages by sender, so I didn't even have to wade through the spam to get to anything I cared about. I was also under the impression that messages sent by the phone company were free (as had been the case the previous month, though they weren't sending quite so many back then.) So I didn't care about it until they tried to charge me 20 cents per text. No way in hell was I going to pay $600 for messages the PHONE COMPANY sent me!
GENERATION 667: The first time you see this, copy it into your sig on any forum and add 1 to the generation
SMS mostly goes away within a couple years of getting regional wireless broadband (whether that's provided by 3G network or Google or municipal wi-fi). As soon as phone software allows you to use the data channel to send short messages (IM, Google Talk, Twitter App, IRC) you aren't going to pay 20 cents per SMS if you can help it.
Our wireless overlords must realize this, and so they've jacked up the price now to make the most of it and help cover the cost of their 3G (and hopefully 4G) networks.
Of course, it's price fixing and also has a relatively greater impact on poor folks (who can't afford fancypants phones with data plans), but as long as we're all distracted by gay marriage and what kind of puppy the president has we won't actually care enough to do anything about it.
Price discrimination doesn't even come into it, because they're charging everyone the same price here. Stop throwing around terms when you have no idea what they mean.
The (great) grandparent was wrong, and you're wrong. Text messaging is not, and should not be, in perfect competition. There are huge barriers to entry into the market--namely, you have to have access to a global telecommunications network. It's not a commodity in the true sense of the word, where the number of providers is great and they are more or less indistinguishable from each other. It is, as I said before, an oligopoly market. And that's not an "evil" term--it's a natural result of the market.
text messages cost almost nothing, therefore, the price of text messages should be almost nothing.
It sounds like you got a C- in microeconomics and are pretty fuzzy on why. Simply assuming supply and demand will set prices is a naive way of examining a market. If the price of text messages were almost nothing, there would be no supply because people would refuse to supply them at such low prices--especially when people are clearly willing to pay a lot more for them. Why focus on a market that provides no revenue when you can concentrate on markets that are a lot more lucrative, regardless of marginal cost to entry? Clearly there are other factors at work than supply and demand. If you don't believe this, I invite you to set up your own text messaging service and compete with the carriers for market share. Given that the cost to enter the market is enormous, and under your interpretation of economics revenues would be extremely low, does that really make sense? If not, then you concede that the market is not in "perfect competition".
The key thing you're missing is that supply and demand do NOT determine prices. The prices are determined by two things, and only two things: What people are willing to pay, and what suppliers are willing to sell for. These two values are affected by numerous factors, supply and demand being only one of them. And furthermore, all of these factors are intertwined and affect each other. Level of competition, which is affected by barrier to entry, which affects overhead and marginal cost, which affects profit margins, which are affected by price elasticity of demand, which is affected by availability of substitute goods, and so on and so forth. But ultimately, it still comes down to those two things: What people will pay, and what people will sell for. That's it. In this case, people are clearly willing to pay the given rates for text messaging, as evidenced by the 3.3 trillion messages sent per year. When that changes--which may be for a multitude of reasons, one of which may or may not be fluctuating supply and demand--prices will change.
That's not true for all countries in Europe.
"Traditionally" in Italy local calls - to the same city and surrounding area - were unmetered (as you put it) since they cost a single "unit" for as long as you were in the same call, even for days...
Later they introduced a metered system, possibly to make huge profits from the newborn internet dial-up industry, but that's just speculation, right ?
"Traditionally" the Telecom companies in Europe are not as uniform as they might be in other federated countries, as even after much harmonisation still today some require you to dial the leading zero when calling a landline, and some don't... (meaning +44 208... versus +39 06...)
Sorry, not true. Norway, which is the only country I know the phone history of, had free local calls in most areas. Then we realized we may as well settle for a flat national landline fee, which was set to around 2 cents in 1994, IIRC - although the closest geographical parallel would be a "flat state price". And it's 5 cents from landline to cellphone and vice versa. We have 99.9% GSM coverage, and 100% ISDN coverage (60% of landline users use ISDN).
We don't have all that silliness with 38947293 different telephone plans. There are tendencies to it with mobile phones, which is a bit irritating.
Mind you, if you correct this for average salary, your phone prices will probably appear even more insane.
The US phone infrastructure is third-world. I am apalled every time I visit the country, and there is no nicer way to put it.
Score one for laissez-faire, or something.
toresbe
Didnt they promise years and years ago, prices will fal with more demand and usage etc.... LIARS.
Their idiot accountants might say, "it has, look, total spent/total sms = x"
People dont care about industry average, they care about the most expensive prices set, or what they get charged.
Liberty freedom are no1, not dicks in suits.
. Norway, which is the only country I know the phone history of, had free local calls in most areas
But it has been the tradition of Germany, England, France, etc...
Then let me see if this is correct: You went from a free local call plan to a charge by the minute one, at 2 cents/minute?
I don't read AC A human right
Sorry, but a company is not require to responsibly price things according to their cost. If you want texting prices to go down, then texting needs to become less popular or more competition needs to come in that offers cheaper or included texting.
Of course it is not required, but it is an obvious sign that there is not enough competition in the industry (or it is too hard for people to switch carriers) if carriers can charge significantly above cost for this sort of thing.
According to my father (who remebers phone prices before 1990 -- I didn't think about them back then), local calls were never free. And remeber that the whole of norway only have 4.5 million people -- so local calls were _very_ local.
From that, we went to a flat price for the whole country. Since there is only one landline network in norway, it doesn't really make sense to differentiate all that much.
Looks like we have some disagreement here. I didn't hit Norway(or the other northern ones) up when I toured around Europe, and I spent some time in Germany, and my brother in Italy.
One exemption doesn't a 'tradition' break - just because one US phone company might of charged for local calls, or one European one didn't, doesn't break the general rule - local calls have historically been free in the USA and toll in Europe.
I don't read AC A human right
The bandwidth comment in TFS is curious - the bandwidth for voice is also there whether you use it or not as well.
nope, there is not enough (wireless, inter-city, etc.) bandwidth available to allow everyone to use their phones at the same time. that's why there's disincentive - cost per minute - built in.
I don't understand how North American companies can get away with such terrible prices and terrible service.
It takes quite a while for companies to get hammered for collusion or price-fixing. Sometimes it never happens, but it's hard to imagine that some form of collusion is not the root cause of all major carriers increasing their prices by the same amount on a service that costs them almost nothing to operate.
I did have Virgin prior to the service I have now (AT&T Go-Phone) Virgin's coverage is lousy--at least here, they use Sprint towers and, even though Sprint uses other towers besides just theirs, Virgin doesn't. I got good enough coverage near the freeway, but couldn't make calls from home and it often dropped calls whenever I was in a building. I never have that problem with AT&T's coverage. The previous deal I had with Virgin was $.25 cents per minute for the first 10 minutes and 10 cents after that. I was spending approx. $5 a month--probably the same deal you have (this deal is no longer one they offer.) Now that I have better coverage, I do use the phone more (which is one reason my cost has risen). My spouse and mom have the same plan so our calls to each other are free.
If you've never been modded as "flamebait" or "troll," you've never tried to argue a minority viewpoint here!