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Facebook May Bust Up the SMS Profit Cartel
AndyAndyAndyAndy writes "Fortune had an interesting article recently about wireless providers and their exorbitant profit margins for SMS handling, especially when looking at modern data plans. 'Under the cell phone industry's peculiar pricing system, downloading data to your smartphone is amazingly cheap — unless the data in question happens to be a text message. In that case the price of a download jumps roughly 50,000-fold, from just a few pennies per megabyte of data to a whopping $1000 or so per megabyte.' A young little application called Beluga caught the attention of Facebook, which purchased the company a Thursday. The app aims to bring messaging under the umbrella of data plans, and features group messaging, picture and video messaging, and integration with other apps. The author argues that, if successful, Beluga (or whatever Facebook ends up calling it) could potentially be the Skype/Vonage or Netflix-type competitor to the old-school cellular carriers and their steep pricing plans."
I've found the available workarounds are sufficient to the point that I could give a crap about texting fees. I use GoogleVoice and TextFree and they work great. My wife uses Virgin Mobile for $25/mo (that's it no extra taxes or garbage) and can text to her delight.
I can already do this. It's called Google Talk (or pick almost any other IM system). Why is "Beluga" any more special than any other IM system?
I remember when SMS was free and was hidden in the advanced menu of a 3-line text display of a phone.
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Well, I can't believe I'm going to say this considering I am definitely not a fan of Facebook, but if this is what it would take to make them drop the completely outrageous SMS price tag, then I'd support it.. And, that's knowing full-well that Facebook is just doing this to increase platform adoption, since if you want to 'text', you'd have to be on FB..
That said, I doubt I'd use it, just because I don't have a Facebook account. But I'm hoping it would lower the SMS fees for myself. Competition is good, right?
I think most of us have known for years that the amount we get charged for cell phone SMS and data plans is really out of whack.
How is something with a limit of 140 chars or so worth the 10 or 15 cents they charge you for it?
They've been advertising broadband and cell for the last decade as "look at all the shiny things you can do", but the price never goes down, and they keep lowering the cap on what you can use.
They've bet the farm selling telecom services, but they can't actually afford for you to use them the way they advertise them. Or, at least, we can't afford to use them the way they're advertised.
Lost at C:>. Found at C.
the way facebook sells and shares private data is too scary, wouldn't want them to have personal contacts or phone browser information
My cellphone bill says otherwise. Saved $30 a month by switching to google talk for international texting.
SMS isn't normal data. Ever notice how you can still send text messages even when you don't have a data connection?
I'm skeptical too. None of the Google Talk messages on my phone have been billed as SMS.
Sorry, but that is not universally true. Even back to the days of the T-Mobile Dash Windows Mobile phone I had. It depends on how the developer creates the IM client. On the Dash if I used (if I remember correctly) AIM it used the data plan. However if I used ICQ or Y! it used SMS to send the "instant messages". Not because T-Mobile charged that way, but because the apps did indeed use SMS to send the "instant messages". Even today on Android, if you use GTalk to instant message, it uses your data plan. Same goes for lots of other IM clients. However if the IM client was created to use SMS then you better have an unlimited SMS plan!!!
Yep. Using Talk let me drop my txt plan. Not to say others aren't, but considering how much Verizon likes to nickel and dime customers, I'd be surprised if others were doing that and they weren't.
"I disagree with you" does not equal "flamebait."
Verizon lets you disable all text messaging other than messages to and from Verizon services. See if your carrier does the same.
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You are confusing "internet companies provide IM clients which bill as SMS if you use them" with "companies monitor traffic to . . ."
if you get your new non-smartphone with its included AIM application and send messages with that, it will likely bill those as a SMS message. That is entirely a different thing.
At least that is my experience.
Cell phone networks use digital voice protocols, of course. Essentially, your audio is being streamed as a (compressed) data file over a data network. The GSM-EFR audio codec has a bitrate of 12.2 kbps. Obviously more modern phones probably use a higher-bitrate codec. That means for one minute of audio 60 * 12.2 kb or approx. 750000 bits of data is sent. One AT&T text message costs $0.20. The maximum size of an SMS message is 1120 bits (140 characters). That means in the data space of one minute of voice you could send 700 messages. At 20 cents each that's $140. Now I'm pretty sure that there aren't any cell phone plans (excluding sat phones) that cost $140 per minute of speech.
I hear they're working on extracting fibrous cellulose from trees that, when dried, you can create images on using nothing more than a graphite stick.
How come Slashdot never gets Slashdotted?
In Europe, we have been getting better rates than you for years. I believe my teenage son sent over 3,000 text messages last month. Beats me how he manages to get good grades and play sports. I think his plan includes 500 talk minutes and "unlimited" internet - he has never gone over anyway. Costs £30/month because he wanted an extra clever phone. I think the cheap plans get down to between £10 and £15.
I have never heard of anyone paying to receive them. It's like post. The sender pays. The only real ripoff we have is roaming abroad costs and the phone companies are supposedly being compelled to lower them. I don't think you want that to happen in your country. That is government restricting business practices. We like it though.
This was not to laugh at you, but to show you what can be done as a start. We need to get it even lower here. Lobby your representatives or something.
I'll see your Constitution and raise you a Queen.
That's not really the case, most of the dumbphone "IM" applications are really sending IMs over SMS.
By the way, does anyone know if they are planning a new version of Kopete? it seems like all real development has ended on it which is a pity because I loved it until the lack of facebook support for months after Pidgin had it killed it for me.
I call it 'The Aristocrats'
Plus One.
Google talk has totally replaced SMS for me on my Android phone.
Even my Iphone friends use one of the many Google Talk clients, like IMO. Nobody in their right mind would use SMS internationally, and unless you paid for the unlimited SMS plan you would be nuts to pay for SMS on a per-message basis.
Google talk is Google's implementation of Jabber, (XMPP) and interoperability with standard Jabber Servers/Clients has improved of late to the point where you can send and receive to just about any standard jabber gateway, and any jabber client.
The Android version of GTalk comes on every Android phone, and is essential for the Android market to work. But it leaves a tad to be desired, as Google has only implemented about half of jabber capabilities on the smartphone platform.
But there are a dozen or so XMPP/Jabber clients in the android market to choose from, some of which handle file transfer and voice calling as well.
SMS is a dead man walking. The carriers priced it out of existence.
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I remember when SMS was free and was hidden in the advanced menu of a 3-line text display of a phone.
SMS messages go over the (VERY!) low bandwidth control channel used for communication between the cellphone and the tower, and from there over the call set-up channels among the towers, their controllers, and the rest of the telephone network. Using them to let cellphone handsets emulate a text pager (and a text pager message sender) was something of an afterthought, put into the GSM spec and then ported to others. Because they're on the control channel, they work even if the phone has no data service or is not data service capable.
Once they caught on and started having major traffic despite the small packet size, the telcos put a price tag on them, both to try to avoid channel saturation and as a handy revenue stream. (Yes even a large number of the little text messages wouldn't clog the channels. But a customer-deployed IP-over-SMS would have been trivial. Charging a few cents for every 140-byte packet killed that idea.)
Now that mobile data services has created a fat data pipe under the separate "payload" bandwidth, moving the services currently running on SMS makes great sense for the users. But now that SMS messages have become a major income stream, despite their extreme price, the carriers have no incentive to kill this surprise cash cow. So the innovation has to come from apps developers.
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A young little application called Beluga caught the attention of Facebook, which purchased the company a Thursday.
Nice. Wish someone would buy me a Thursday.