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Facebook May Bust Up the SMS Profit Cartel

Posted by Soulskill on from the bytes-and-cents dept.

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."

4 of 262 comments (clear)

  1. Google Voice and TextFree by Mean+Variance · · Score: 5, Informative

    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.

  2. I'm getting old by guruevi · · Score: 5, Insightful

    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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  3. Anything to stop the carriers.. by iONiUM · · Score: 5, Insightful

    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?

  4. facebook very untrustworthy by rubycodez · · Score: 5, Insightful

    the way facebook sells and shares private data is too scary, wouldn't want them to have personal contacts or phone browser information