Messaging Apps, VoIP Already Eating Into Carrier Revenue

An anonymous reader writes "A new breed of messaging services and mobile Voice over IP clients like Skype are already eating into carrier revenues according to a new study. '... one-third of carriers are already seeing voice traffic and SMS revenue decline as a result of the increased popularity of third-party solutions. ... For years, Research In Motion’s BlackBerry Messenger service has been one of the top features consumers and enterprise users loved about BlackBerry devices. It took much longer than some expected, but other vendors and third-party developers have finally come out in full force with competing services that provide SMS-like messaging over data networks at little or no cost to the user."

Comments

The funny part

[0123456]

Is that the data messaging probably costs the carrier more than SMS...

Re:The funny part

[Anonymous Coward]

SMS is technically free. The only cost is counting/bill.

Re:The funny part

[TWX]

Considering that SMS uses the same packet radio features that cellular networks use to keep the network appraised of where the phone is, and that packet size is much larger than the data that is transmitted per packet requiring the packets to be buffered out with null data, and that fitting the SMS messages just fill the rest of the packet that has to be transmitted anyway, even charging for SMS messaging is a crock.

I can understand charging for image or audio messages, as those actually do impact the use of the network. Charging for SMS, though, that's just sheer greed.

My wife and I got unlimited minutes cell plans when they were novel and first introduced to long-term customers several years ago, and we didn't get any SMS or data for her since she doesn't have a smartphone. Consequently, we used voice airtime even when SMS would have worked, as we didn't want to pay $0.20 for less than 300 characters. Because the carrier is greedy it actually cost them more for us to be customers.

I also believe that data features on smartphones that are provided by the carrier and OS on the phone, like e-mail, directory services, map data, and other non-web, fairly low-bandwidth data services should be complimentary with the purchase of the data plan, and should subsequently not count against one's 2gb cap or whatever the cap may be. But, apparently cell companies right now don't agree with me.

When I travelled overseas I found cellphones to be a much better deal. That they cost so much here for what one gets compared to overseas where they have the hell regulated out of them means to me that letting companies operate as they will, with contracts to the users, carrier-locked phones, and more than a single network standard further preventing even unlocked devices from conveniently switching between some carriers to be BS.

Re:The funny part

[Captain Splendid]

Won't somebody please think of the free market?

Not gonna happen. Libs fear it, Conservatives abuse it, and the Corporations want to get rid of it.

Best of luck.

Re:The funny part

[TWX]

The Free Market is a myth and always has been. Like the Laffer Curve and the trickle-down theory of wealth distribution.

Re:The funny part

[beschra]

Oops on moderation.

Re:The funny part

[Shatrat]

This is not true in my experience. Larger companies inevitably do buy the smaller companies once they start gaining ground, though.

Re:The funny part

[BitZtream]

Considering that SMS uses the same packet radio features that cellular networks use to keep the network appraised of where the phone is, and that packet size is much larger than the data that is transmitted per packet requiring the packets to be buffered out with null data, and that fitting the SMS messages just fill the rest of the packet that has to be transmitted anyway, even charging for SMS messaging is a crock.

Agreed, BUT, if you don't charge, the bandwidth available for that purpose would be saturated with people freeloading.

SMS charges ARE a crock of shit, but they can not be free without a fundamental change in human behavior or they will be unusable.

Re:The funny part

[icebraining]

Usually yes, but where I live a mobile operator had to upgrade infrastructure because during the holidays (Christmas/New Year) the SMSs were delayed for as much as two days.

Re:The funny part

[roc97007]

Right. And by charging extortionate prices for what is essentially a free service, the carriers have made it financially viable for competitors to flourish, even if they are ostensibly more expensive to run. Which is fine, that's how capitalism is supposed to work. The carriers could shut down these other services by significantly lowering the price of SMS services, but it's such a cash cow I think they'll try something else... maybe legislation?

Re:The funny part

[frosty_tsm]

The Free Market is a myth and always has been. Like the Laffer Curve and the trickle-down theory of wealth distribution.

Oh, there's a trickling sound alright. ;-)

The Laffer Curve opens up some interesting economic ideas. The problem is that we're to the left of the peak so reducing taxes simply reduces revenues.

Re:The funny part

[icebike]

Is that the data messaging probably costs the carrier more than SMS...

Maybe, maybe not.

As we move to LTE, there may no longer be any need for a signaling channel (which is what SMS rides on for free).
The carriers, while bemoaning the lost revenue are probably just as happy to see SMS disappear as anyone else.

Data messaging (data in general) is just another few packets in the data stream, where the routing is not their problem. Throw it on the internet and forget about it.

The story linked to in the summary more or less hints at this:

“This is one of the primary reasons the industry is currently moving towards an all-IP converged core network accelerated by the deployment of LTE technology. By allowing users to place high definition voice and video calls, chat, share content, and discover new services as part of a globally connected framework, operators can retain and even grow their share of customer communication spend.”

Carriers are setting prices and data tiers now so as to be properly positioned for what is coming in the future. They realize they will end up being dumb TCP/IP pipes covering the last mile(s) of open air, and they won't be selling you minutes or messages; Just Megabytes.

Re:The funny part

[Anonymous Coward]

Wot Rubbish! There are are costs equipment, operations, and bandwidth. Bandwidth may not be the major cost. SMS messages are grossly over priced at the consumer level. But let's have an discussion that's rational, based on facts and evidence.

Re:The funny part

[icebike]

SMS is technically free. The only cost is counting/bill.

If you consider only the radio spectrum involved in delivery, you could make that argument.

But the messages have to be routed, handed off to other carriers, stored and forwarded, etc. This has a real cost, even if the last mile imposes no additional burden on the cell tower.

Further, you must amortize your network, every switch, tower, transmitter, fiber optic. You spread these costs over every service you provide. If people dropped their voice plans and kept only their sms plans, you STILL end up having to maintain the same towers, networks, and switching centers.

So SMS messages are essentially free as long as you look ONLY at that segment of open air between the tower an your phone.

That being said, the rate charged for these things are beyond all measure of the actual costs. I'm not defending the pricing.
I'm simply calling into question the rather myopic view that they come down the same pre-existing signaling channel and are therefore free.

Re:The funny part

[Anonymous Coward]

Right. So, in other words, it doesn't cost the carrier any extra than it would otherwise, therefore it's free. QED.

Did someone enable your -verbose and -idiot flags when you booted up this morning, or what?

Re:The funny part

[teg]

SMS is technically free. The only cost is counting/bill.

Carriers don't charge SMS usage fees because of the big variable costs... they charge because they can, because it has a value to the customer.

A large part of the cost for a carrier is fixed cost - the various priced services is just how to they believe they can recoup most of it and make their profit. If noone pays for SMS anymore, they'll instead have higher costs for talk or data than they do now. They know how much money they need to earn per handset on average, and that's what they'll get one way or the other.

Re:The funny part

[linuxwolf69]

But don't they have to do all of this to be able to make calls anyway? The only difference being that SMS could be sent out more frequently than calls, thus causing slightly more handing off to other carriers.

Also, I've never heard of an SMS only plan. I think the argument here is that since all of this connectivity must be maintained for the Voice network, why are we paying so much for the SMS, which essentially costs a very small amount of cost on the provider's end when looking at the fact that all of their infrastructure and interconnectivity is needed for the voice portion of the service? That's what GP means by "technically free".

Re:The funny part

[shutdown -p now]

I don't see what's wrong with Laffer curve per se. It's pretty obvious that there is a point at which paying taxes becomes more unprofitable than moving business elsewhere. The relevant question is, where the peak at the curve actually is. The common argument coming from conservatives is that we're beyond that peak ("taxes too high") and therefore need to tax less. I think the evidence shows that, if anything, the opposite is true - the peak is way above the current tax rate.

Re:The funny part

[linuxwolf69]

This is not true in my experience. Larger companies inevitably do buy the smaller companies once they start gaining ground, though.

So... how is this not the table heavily tilted towards larger companies?

Re:The funny part

[uigrad_2000]

SMS technically is not free. If it was, then they would just send all voice data through SMS packets.

Voice data is limited. SMS is limited. (see the Shannon-Hartley theorem page on wikipedia.) With basic GSM or CDMA, a voice channel was used to send SMS data. Although the channel was quickly released after being reserved, it still could cause a tower to be overloaded, if each person sent enough text messages per second.

With GPRS (aka 2.5g), SMS were moved to a separate data packet type that could piggyback onto a voice channel that was already in use for a different SU. The motivation for the change of the standard was that customers would not ever be changed by the networks again for SMS.

Now, we are throwing around terms like 3g and 4g, and most carriers still charge differently for plans with and without text plans. This should make it plainly obvious to everyone that it's a gimmick to get more out of the average customer, which I believe was your point. But your assessment that it is technically "free" for the carrier is incorrect.

Re:The funny part

[TWX]

The inherent problems with the laffer curve are that first, one can not tell where one is in relation to the peak, and second, there's no defined measure of a desire to perform for money versus the taxation on that money in this country. We don't know where were are on the curve, and we [b]don't even know where the curve itself is[/b]. Sure, if you can fix those then the tool is a great one, but right now it's just a loose concept.

My high school macro-econ teacher was about as conservative as they come, to the point of helping run schoolboard members' election campaigns. But, he even said that the laffer curve is useless because there's no way to figure out where one is on it.

Re:The funny part

[BitZtream]

But don't they have to do all of this to be able to make calls anyway? The only difference being that SMS could be sent out more frequently than calls, thus causing slightly more handing off to other carriers

Yes, and they charge you for doing so. Thats part of why you pay per minute.

Also, I've never heard of an SMS only plan

Because you haven't looked. SMS only plans are rather popular for field equipment that need to send back notification messages to central systems without costing an arm and a leg to run each month.

The GP means he doesn't understand how it costs money so it must be free. That doesn't actually make it free. Even with all the infrastructure being built out 'for voice', if you ignore all the costs involved for services that are also 'for voice' you STILL have to count the additional work that is required to move the message in from one device and out to another, it has to be buffered for instance, which uses energy.

The cost is mind numbingly low, but its does exist.

Re:The funny part

[BitZtream]

Because the smaller company makes far more than its worth when it gets bought out?

Re:The funny part

[icebike]

Well all I am trying to point out is that "Technically free" is a pointless argument, not supported by any rational business case.

Nothing that uses your infrastructure is technically free.

It has been stated that the reason many people experience calls going direct to voice mail is because of signaling channel congestion.
Some links to this phenomena appear here, and here.

(Signaling channel (probably not the right term, but someone is sure to jump in with the correct one) is the common channel signaling system that the towers talk to the handsets with. This channel is also used by the tower indicate it has a call for that handset.).

Re:The funny part

[jthill]

When pennies per message,

the rate charged for these things [is] beyond all measure of the actual costs,

you've given the living definition of "too cheap to meter".

Re:The funny part

[icebike]

Please re-read the post to which you are replying. Everything you've said is implicit in that post.

But again you are making the mistake of looking at one TINY portion of the entire network and ignoring the end-to-end costs.

Re:The funny part

[PopeRatzo]

But let's have an discussion that's rational, based on facts and evidence.

Well, the evidence shows that the big telecoms are greedy bastards that would love to own the Internet.

And it's a fact that in the past decade there has been an effort to consolidate all the telecommunications companies into just a few, stifling competition, and that the bigger the telecoms get, the worse they are to deal with. It's a fact that the increasingly powerful telecommunications companies have put most of the private ISPs out of business, forcing everybody, every business, to deal with one of them if you want to use the Internet (at least in the US).

So, it's rational that any way to give less of your money to the big telecoms is a good thing, thereby threatening their monopolistic control over all electronic communications and the spread of information (we've seen intentional outages used to thwart demonstrations, for example, and certain big telecoms enabling warrantless wiretaps on American citizens).

If we had a functional government instead of a privately owned and operated bureaucracy, they would bust the big telecoms into hundreds of smaller companies. It did wonders the first time that was done decades ago.

Re:The funny part

[Pence128]

Imagine paying 7 cents to send an email.

Re:The funny part

[EdIII]

but it's such a cash cow I think they'll try something else... maybe legislation?

That's how the DMCA was born. If they could not persuade or stop the consumer outright from bypassing their restrictions they did get legislation making it illegal.

Don't expect common sense and decency to stop the passage of the law either.

Re:The funny part

[EdIII]

But the messages have to be routed, handed off to other carriers, stored and forwarded, etc. This has a real cost, even if the last mile imposes no additional burden on the cell tower.

I agree with you, but it important to point out that routing, including "peering and transit" is already established and not part of the cost calculations for SMS. SMS is just a different type of communication, and does not require its own special hardware or communication protocols specifically. At least not to my knowledge.

Routing the SMS message internally does not add significant cost or complexity. The OP is actually correct in a sense. The billing and reporting on SMS messages actually costs more than sending the SMS, at least internally.

There is already a TON of traffic in between carriers. Validating roaming status, call set up and teardown, etc. The costs, that the carriers created, was the massive gateways and complicated short code system to sell SMS to businesses.

As you said, even considering the costs of the gateways themselves and the bureaucracy of SMS shortcodes and premium charges, they are still making 6 figure profit margins, at a minimum.

The cost of SMS is completely artificial. It has never made sense to me, other than greed and avarice, to sell SMS at all. It should be a completely free service intended to be "added value" to the services already being charged for. Considering people's penchant for using it so damn much, it actually lowers their costs and increases how much service they can sell. If a typical SMS exchange is 1/1,000,000th (or less) of the data passed during a conversation then it is to the advantage of the carrier to encourage it. Such egregious charges do the opposite.

Now they are fucked.

Skype and persistent IM solutions using their data connections represent a HUGE increase in actual traffic passing from the tower to the handset, where it is most expensive.

Not to mention the solutions that allow you to send recorded messages back and forth. No charges for SMS. No charges for cellular minutes usage. Nothing but data, which they still make unlimited on the handset.

Not smart. They deserve what they have coming to them because it was so easy to stop. Longer SMS messages and a completely free service would have provided a heck of lot less incentives to find solutions around their crazy pricing.

Re:The funny part

[roc97007]

No of course not. There's too much money at stake. Never mind it involves charging big bucks to exploit otherwise unused bandwidth.

I remember reading somewhere that texting was by far the most expensive consumer medium (per character) for transmitting a message. I think it's remarkable that our "family unlimited texting plan" which essentially only my daughter uses, cost the same per month as the internet connection to my home.

Re:The funny part

[rhakka]

which means fuck-all to the end user. so this is a free market in building and selling small companies, but not so much a free market in telecommunications.

Re:The funny part

[Somni]

SMS does indeed require its own set of hardware and communications protocols to support.

The hardware is the SMSC, and the protocols are a bit of a soup; primarily it's signaling over voice channels, but there is also SMPP. Your SMPP binds, of which there can be many, usually go over VPN tunnels. VPN tunnels impose load on firewalls, which can be fairly expensive.

Certainly, the cost of the hardware and increased load is nowhere near the charge per customer. But pricing is rarely based on how much it costs to produce a thing, but rather how much the people who want it are willing to pay. If they aren't willing to pay as much anymore then the pricing should go down.

Re:The funny part

[Thing 1]

I'm considering starting the "Math and Science Party".

Re:The funny part

[vakuona]

I wouldn't mind getting 7c for each email I receive.

Re:The funny part

[swalve]

12 cents to text a broad? Where do I sign up?

Re:The funny part

[swalve]

If I remember the basics (for GSM), there are set timeslices when phones that can hear a tower are allowed to ping back and say "I'm here, got anything for me?" If there are too many phones pinging the tower, it won't hear some of them. The phone itself will ping the tower once every 1.75 seconds, I think. This is done so that the phone's radio can be off most of the time. Radio on- ping- listen- radio off.

Re:The funny part

[swalve]

A billion feathers weighs a lot.

Re:The funny part

[swalve]

I don't think Laffer ever said anything more than that. He just said the concept exists. And it does. (Although I would expect that the peak would be right around 50%.)

Re:The funny part

[tsa]

One SMS equals one second of voice data. Because one SMS is normally as expensive as one minute talking, SMS is 60 times more expensive than talking. I think that is the biggest ripoff in the history of mankind. Even the music inductry has never been able to pull that off.

Re:The funny part

[DarwinSurvivor]

7 cents for national texts and 12 cents for texts abroad isn't that bad -- and that's with the simplest plan out there (basically: use what you like, pay afterwards). Another plan would probably be cheaper.

That comment would have cost 24 cents to send via SMS at those rates. That's almost 5 pieces of gum!!!

Re:The funny part

[tenco]

Imagine spammers paying 7 cents per email.

Re:The funny part

[roc97007]

What carrier? I've had AT&T and Verizon and they both want to charge per message or charge you $20 -- $40 for unlimited texting.

Re:The funny part

[metamatic]

They didn't have to upgrade the infrastructure. SMS delivery isn't guaranteed at all, let alone guaranteed to occur within a specified time frame. The standards say that carriers can feel free to drop SMS messages if the destination handset is temporarily out of service, even.

Re:The funny part

[icebraining]

Don't confuse technical implementation details with consumer services: just because they're both called "SMS" doesn't mean they're the same thing.

Occasional errors are one thing, but if they charged and failed to deliver tens of thousands of SMSs, you can bet they would have the consumer protection people on their backs pretty soon, not to mention the negative PR.

Re:The funny part

[metamatic]

Apparently you don't live in the USA then.

Re:The funny part

[icebraining]

Nope ;)

Re:The funny part

[Coren22]

He isn't in the US. In Europe people use SMS much more often than calling, in the US it is reversed (unless it is a teenage girl, in which case they text constantly).

There are some new carriers popping up that offer free SMS with the plans, but they are small fries like Cricket.

Re:The funny part

[Coren22]

Oh, and also, my Verizon Android plan included unlimited texting, it isn't an addon like normal plans, but I also pay extra for the unlimited data plan that doesn't exist anymore.

TextFree+Voice

[markass530]

Free Texting (and they give you a phone number) and phone calls. All the solutions I'm aware of lack Picture Capability, but Google is working on that I Think. Fuck AT&T & Verizon's 20 bucks a month for texting, that's all I'm saying. Anyone who pays so much for so little needs their head checked

Re:TextFree+Voice

[oakgrove]

I can't receive random pictures and videos over text messages with Google Voice you say? That's a feature!

Re:TextFree+Voice

[MobileTatsu-NJG]

All the solutions I'm aware of lack Picture Capability...

iOS 5's iMessage supports sending of photos and videos. Chances are I won't have an SMS plan much longer.

Re:TextFree+Voice

[alexandre_ganso]

AND... they receive animated GIF when the recipient is on wifi!

Re:TextFree+Voice

[optimism]

*uck AT&T & Verizon's 20 bucks a month for texting, that's all I'm saying

I dunno about Verizon, but AT&T charges me $5 a month for 200 SMS or MMS messages.

If someone uses their unlimited service for short text messages, then yes, that person needs to wake up and realize that they can "text" practically for free using other apps.

But if you use the $5 service to send mostly video & photo messages, it makes more sense. Super convenient too.

YMMV.

Re:TextFree+Voice

[omnichad]

There's Google Voice for that.

Re:TextFree+Voice

[realityimpaired]

Free Texting (and they give you a phone number) and phone calls. All the solutions I'm aware of lack Picture Capability, but Google is working on that I Think. Fuck AT&T & Verizon's 20 bucks a month for texting, that's all I'm saying. Anyone who pays so much for so little needs their head checked

Depends on your carrier, I guess.

https://shop.koodomobile.com/plans/add-ons/index.html

I can get Unlimited global texting for $5/mo, Call display for $6/mo, and Voicemail for $6/mo, or I can get all three for $10/mo. By NA standards that's stupidly cheap... but European and Asian standards, that's ridiculously overpriced. It depends on who you're with, I suppose. That said, ATT seems to like fucking its customers over, just going on past example.... perhaps your problem isn't that you're paying for texting, it's that the company you're with has their heads so far up their asses they can see out their mouth....

Re:TextFree+Voice

[MobileTatsu-NJG]

You can rationalize it any way you like, but when you say things like "people that matter don't use iOS" you still sound just like those obnoxious Mac fanatics from the mid-to-late 90's.

The righteous don't know they're a cult.

Re:TextFree+Voice

[BitZtream]

So ... no one?

Lets face it, I have more friends with iPhones than you probably have friends total, so jump off your high horse and join reality, dick heads like yourself can't afford to be so picky about their friends.

Re:TextFree+Voice

[MobileTatsu-NJG]

Uhm... Why didn't you do this earlier?

Because I need the people on the other end to do it, too.

Or are you going to say it's revolutionary or easy to use or some BS?

Several people I do SMS chats with upgraded to iOS 5 and instantly I have far fewer paid messages going through. This example of ease-of-use is BS?

Re:TextFree+Voice

[tepples]

How about "a lot of people who matter still use dumbphones"?

Re:TextFree+Voice

[RulerOf]

Fuck AT&T & Verizon's 20 bucks a month for texting, that's all I'm saying.

And you should say it loudly and proudly.

I switched phones and had trouble with data services pulling in after moving a SIM. It required customer service to override my features because "$5/month for 200 SMS" doesn't fucking exist as an option anymore. The only pricing tiers left are "YAY Unlimited SMS for $20" and "Teenager on your account == Rape."

Re:TextFree+Voice

[MobileTatsu-NJG]

The whole point of this article is that usage bills are going down. No, that didn't help.

Re:TextFree+Voice

[ottothecow]

No, that's google talk.

Google Voice is a separate text and voice bases service that actually can operate across the carrier networks. Its voicemail features are sweet...and the free texting is nice (but the android app requires a data connection and is seems kind of buggy when you have bad service...while texts are still reliable)

Re:TextFree+Voice

[KlomDark]

Your parties sound boring and farty.

Re:TextFree+Voice

[scot4875]

You can rationalize it any way you like too, but there are douchebags on both sides. The fact that you try to make it out as Apple fans being perfectly reasonable, and Android fans being jealous douches plants you firmly in Apple douche territory.

--Jeremy

Re:TextFree+Voice

[Keen Anthony]

Except Google Voice doesn't do MMS, and Google's answer to MMS once it comes will be forwarding the message to email.

Re:TextFree+Voice

[omnichad]

There's email for that.

iMessage

[DigitalGodBoy]

My text usage has dropped about 85% now that iMessage is automatically taking every iPhone user's texts over the Apple's server systems. Pretty handy.

Re:iMessage

[Nerdfest]

Proprietary solutions are not helping anybody but the people who create them, be it Apple or RIM.

Re:iMessage

[TWX]

Which takes up more bandwidth toward your X gb cap? SMS traffic, or forwarding more complex imformation through Apple's servers?

I'd bet on the latter...

Re:iMessage

[canajin56]

I can only speak for Google Talk, not for the Apple chat thing, but the amount of bandwidth is tiny. I use Google Talk all the time instead of texting, and the bandwidth used up isn't even worth mentioning, and I'm only on a 500MB data plan!

Re:iMessage

[Nerdfest]

Yes, I told everyone I know not to buy products from a company that promises to open a standard, doesn't do it, and then advertises heavily that you can use it to communicate between all of the different devices from that company. I'm specifically talking about FaceTime here, not iMessage. Major dick-move. I don't think they even promised to open the protocol for iMessage.

Re:iMessage

[icebike]

Yup, but the protocols for their own video calling system are open and published. You are welcome to implement your own alternative. Which no one did so far, AFAIK.

If you are bothered by it, did you do something?

Published, maybe, Free, not.

With a zillion protocols to choose from why did apple invent their own.

XMPP (Jabber) was there all along, and its under active development and enhancement, its free, cross platform and is being extended to handle video, voice, and multimedia with the formalization of LibJingle. In addition to a world wide network of free servers, it can now work with no server at all.

Google uses it. Microsoft uses it. Why did Apple have to invent their own?

Could it be that XMPP could reach out beyond the garden walls?

Re:iMessage

[StikyPad]

They're helping lots of people by lowering their bills. Apple and RIM may be helped by their own actions as well, but that's a far cry from saying they're the only ones who benefit.

Re:iMessage

[shutdown -p now]

Thing is, Apple could easily run this infrastructure in an open way - say, as a federated XMPP server - and just publish an open extension that lets you figure out if the sender (defined by his phone number) is signed up for that infrastructure or not. Then it'd all work just as transparently as iMessage does today, but for all phones that would implement this system.

Unfortunately, it seems that their solution is restricted to their ecosystem - even if Google wanted to, say, run their own servers to do the same for Android, they couldn't interoperate with iPhones. That sucks.

Re:iMessage

[Nerdfest]

For extra 'dick-move' points, they actually built it on top of XMPP.

Re:iMessage

[teg]

Thing is, Apple could easily run this infrastructure in an open way - say, as a federated XMPP server - and just publish an open extension that lets you figure out if the sender (defined by his phone number) is signed up for that infrastructure or not. Then it'd all work just as transparently as iMessage does today, but for all phones that would implement this system.

If the big phone vendors did that, the phone companies would increase other prices. They need their ARPU to be roughly in the ballpark it is now to fund their operations. If SMS revenue disappears, most of it would be recouped elsewhere across the industry.

Re:iMessage

[alexandre_ganso]

Where does microsoft use jabber?

Re:iMessage

[icebike]

Where does microsoft use jabber?

See this :

  http://www.microsoft.com/presspass/features/2009/oct09/10-01ucinterop.mspx

Re:iMessage

[rakaur]

So why doesn't everyone just use an IM client and talk to their friends using XMPP or AIM or YIM or anything else besides SMS? That's what I do. iMessage is nice but I don't understand why people go nuts about it and BBM when IM has been there all along...

Re:iMessage

[shutdown -p now]

I don't really care that much about SMS fees, more about having a clear path to deprecate the protocol and replace it with something better with more features etc in a way that is transparent for the users. iMessage effectively does that, but only for iOS devices.

Re:iMessage

[narcc]

That's because no IM app (iMessage included) comes close to matching the features of BBM.

Even better, I don't have to give out my email address or phone number to connect with other BBM users.

Prices are rising in response

[Zouden]

Here in the Netherlands all 3 major mobile carriers recently raised their prices (and/or lowered their download limit) within a few weeks of each other. Vodafone cited falling SMS revenue due to WhatsApp. This isn't surprising; I send maybe 3 text messages a month now compared to about 1,000 using WhatsApp.

Evolution...

[Anonymous Coward]

In the end, all you will need is a smart phone and a data connection. 4G with quality of service for VoIP and you only need a data contract.

Re:Evolution...

[PsyciatricHelp]

exactly. Of course with all other industries its about holding control as long as possible. Technically everything you do on your phone (smart or not) is nothing but data usage. your voice already uses a form of voip. not ethernet based but it is just data. the migration to data only plans is inevitable but I expect to see the phone companies fight it as long as possible.

Re:Evolution...

[JuzzFunky]

You may not even need a data connection!!
I attended TEDx Adelaide last weekend where Paul Gardner-Stephen spoke about the Serval Project. There's two parts to the project. One is a mesh network that uses your phone's built in wi-fi. The other is more aimed at disaster relief and uses small phone towers that can be air dropped .
From the Serval Project site (link above)

Communicate anywhere, any time without infrastructure, without mobile towers, without satellites, without wifi hotspots, and without carriers. Use existing off-the-shelf mobile cell phone handsets. Use your existing mobile phone number wherever you go, and never pay roaming charges again. Communications should not just be for the fortunate — communication should be freely available to everyone, because we believe communication should be a human right. Serval enables mobile communications no matter what your circumstance: mobile communications in the face of disaster, in the face of poverty, in the face of isolation, in the face of civil unrest, or in the face of network black-spots. In short, Serval provides resilient mobile communications for all people, anywhere in the universe. Serval technology bridges the digital divide. We have proved that it is possible, using open source technology to create a mobile communications platform that benefits everyone, for all time, and changes the nature of telecommunications forever.

Google Voice and GrooveIP

[oakgrove]

Between the 1 2 combination of Google Voice and GrooveIP, Verizon is "losing" a ton of revenue from me. My text messaging needs are natively handled by Google Voice and with some help from the grooveip app, Google Voice handles my voip needs as well. I just turned off my texting carrier plan and cranked my minutes to the absolute minimum. Fortunately I'm grandfathered in on an unlimited data plan from Verizon to make this all possible. I have unlimited monthly calling minutes and messages on the lowest plan Verizon carries. I just carry my OG Droid around as a glorified Mi-Fi and keep my Nexus S tethered. You wouldn't even realize theNexus doesn't have a similar card the system works so well.

Prices go up, usage goes down?

[jandrese]

So shortly after all of the major carriers dropped the even slightly reasonable SMS plans, people started using the hacky but free alternatives? What a shocker. This seems like a classic example of what happens when you price yourself right out of the market.

Re:Prices go up, usage goes down?

[jeffmeden]

So shortly after all of the major carriers dropped the even slightly reasonable SMS plans, people started using the hacky but free alternatives? What a shocker. This seems like a classic example of what happens when you price yourself right out of the market.

If you want to see Price Discrimination at work, check out the prices on Mobile Virtual Network Operators (companies that buy access to Verizon, ATT, Sprint, etc. in bulk and resell it via subscription or prepaid contracts.) MVNO carriers offer basically the exact same coverage footprint, you can use the exact same set of handsets (but without a contract, the prices are obviously much different) and yet a MVNO will charge you at least *half*, if not less, for the exact same number of minutes, text messages, and data. Why more people don't use them instead of continuing to be extorted by the big carriers is beyond explanation. If gas cost half as much but you had to pump it yourself (oh, wait) how many people would ever go to full-serve filling stations?

Re:Prices go up, usage goes down?

[realityimpaired]

Actually, what surprises me is that the incumbents in the US don't seem to have fight brands. I'm with Koodo, in Canada, which is a wholly owned subsidiary of Telus... On Telus, you get 150 anytime minutes and data for $50/mo, add $15/mo for call display/domestic texting, and long distance is extra. On Koodo, you get 150 anytime minutes, 5pm evenings/weekends, data, unlimited global texting, call display, voicemail, and unlimited long distance for $45/mo. You're buying the service from the same company, with the same towers, you can put a Koodo SIM in a Telus phone and vice-versa without unlocking the phone, but because you're buying from the fight brand, you get a good deal. My price is still stupidly overpriced when compared to what can be had in Europe, but I'm getting a much better plan than I could get from one of the incumbents....

Re:Prices go up, usage goes down?

[ArhcAngel]

Why more people don't use them instead of continuing to be extorted by the big carriers is beyond explanation. If gas cost half as much but you had to pump it yourself (oh, wait) how many people would ever go to full-serve filling stations?

Perhaps if your analogy were tweaked a bit it would make more sense. Let's say you walk in to your local Shell station and the attendant informs you that if you agree to only buy gas from shell for the next 1/2/3 years Shell will sell you a Cadillac/Lexus/Infinity for the price of a Chevy Cruz. You pay more for your gas every month but you got a sweet deal on a new luxury automobile. What doesn't make sense is people who willingly go month to month paying the same rate for gas as the ones who got the luxury auto.

Re:Prices go up, usage goes down?

[ssyladin]

I live in Oregon / New Jersey you insensitive clod!

(FYI: Those states require, by law, that gas is pumped by an attendant.)

Who cares?

[Anonymous Coward]

Seriously -- who cares? Carriers have been ripping off their customers on SMS data rates for years. I recently signed up for a new cell phone, and instead of a decent messaging plan that offers 200 SMS messages or something for a reasonable rate like $5 or $10 per month, my carrier now only offers either unlimited messaging for an extra $20 per month, or $.10 per message. There is no in between any more.

Is it any wonder people are trying to abandon them as fast as they can?

Re:Who cares?

[MobileTatsu-NJG]

For years the American Consumer has been saying "We want to pay the same amount every month for a service, worry-free about overages. We want predictability. We want to be able to budget and plan ahead." It makes sense, right? But for some reason, we can hand these companies over a fairly large sum, more than we'd pay if we really fine-tuned our service preferences, and they'll still want more out of us. The SMS thing, in particular, kills me just on the grounds that we are just handing them over pure profit. Yet they still keep upping the prices on it.

I was really happy to see people stand up and tell the banks NO to the debit card fees. I can't help but hope that we start stepping up more to fight all this nickel-and-diming. I think it's time for me to start putting a little more energy into doing just that. I recently had a problem where Time Warner would call me every few months to offer me digital phone service. Each time I'd tell them to stop calling me. I had to spend an hour on the phone one night to finally nail that down for good. (To their credit, it has been almost a year and not even an advert has come through the mail.) But... if they do, I'm dropping one of my premium services. I like HBO, but I don't really need it. I'm wiling to bet if other people started removing upsells from their services these companies might settle down a bit.

Re:Who cares?

[Moof123]

I've yet to be able to comprehend the crap people put up with from these outfits. I refuse to do a contract because I want to be able to drop bum service at the drop of a hat. The latest phone is a crummy Android phone I got for $85 (Optimus V), and am doing the $35/month non-contract gig with no data or SMS limits. Still more than I want to spend given how little I use it, but a hell of a lot better than the bottom tier $90/month iphone plans that lock you in for 2 YEARS.

Re:Who cares?

[MobileTatsu-NJG]

Time Warner tried to get me to do a contract once. They attempted to tantalize me by saying "a two year contract will lock in our rates!" I chuckled at this for a couple of reasons. 1.) They just told me they're raising their rates. 2.) Verizon FIOS is on the horizon.

I politely ignored it. But if I had it to do over again, I would have answered their request for feedback. If they really wanted me to sign a contract with them, there would have to be a few stipulations in place. I wish I had told them what I'd want in the contract:

1. There will be absolutely NO throttling of of my service for any reason. I don't do piracy, so if I do use BitTorrent it's for a legitimate reason. In exchange, you can disable that 'boost' feature that shoots me up to some ridiculous speed for a few seconds to make the benchmarks look good.

2. Unlimited means unlimited. Under no circumstances will my connection be capped. In exchange, if I was causing an actual problem, I'd grant permission for a polite phone call or email request to tone it down. That doesn't mean I will, but I'm actually a reasonable guy and don't need to be shut down. The odds are good that I'd just say "Okay, I'll slow down the Netflix usage a bit."

3. There will be no phone calls or adverts in the mail for new services. If I'm signing a 2 year contract, it means I'm happy with exactly that level of service. Should I decide I want to make my monthly bill bigger, then I can use my whiz-bang internet connection to find out what you're offering.

4. There's an expectation of quick turnaround when something breaks. My connection will not go down for more than a day. (Well, I'm not talking about outages due to natural disasters or anything like that.) Any longer than that and I have the right to break the contract without an ETF. Of course I'd be a lot less likely to want to do that if my bill for that month was reduced due to the outage.

They'd never go for this, and that's a shame. The real tragedy of it is I'd be willing to pay more per month if these conditions were put into place. They may see it as increasing costs, but they should see it as increasing value.

Oh well, I can dream.

Re:Who cares?

[teg]

The SMS thing, in particular, kills me just on the grounds that we are just handing them over pure profit. Yet they still keep upping the prices on it.

It's only pure profit if you then think of running the infrastructure and the rest of the company as a separate business and pure loss. The services aren't priced at what they cost to produce - they are priced at a combination of what the value of a service is to a customer and the need to provide a certain average revenue per customer to cover operations/investment and profit. Adjusted for the competitive landscape, which all have the same need (cover costs and profit, most of the costs being fixed).

Of course, pointing out this doesn't mean that I think the US has working competition in telecom.... big mergers, separate technical standards, lack of "bring your own phone" plans (partially due to the former) and long customer lock-ins say otherwise.

Re:Who cares?

[KlomDark]

Holy crap, I agree with Tatsu for once! :)

That's what happens.

[JustAnotherIdiot]

You gouge the prices to unreasonable levels (especially on a sub-par service), people are going to find a way around paying.

Re:That's what happens.

[JustAnotherIdiot]

Because, you know, it's IMPOSSIBLE for more than one person to have the same thought.

Bye

[jimmerz28]

And hopefully just like publishing companies we soon won't need separate wireless phone carriers.

All we'll need is a wireless network.

Re:Good for several reasons

[TWX]

I thought the whole point was that SMS uses the remainder of the defined packet size that's otherwise filled with null characters because of the nature of the packet sizes that were chosen when this kind of radio communication was implemented... In short, SMS costs nothing when the data is already being transmitted OTA anyway...

Welcome to dumb pipes.

[LWATCDR]

What people really want are dumb pipes. Imagine if you could just get a data plan and then pick your VOIP carrier?
And if you could just stream the video you wanted at home..
And that is just exactly what Comcast, AT&T and Verizon do now want you to do.

Re:Welcome to dumb pipes.

[TWX]

Keep in mind that for everyone who wants a dumb pipe, there's someone who wants America Online, even if they have no idea why they want it.

That's how all of these "features" that cell phone companies concoct manage to keep customers coming in.

Re:Welcome to dumb pipes.

[omnichad]

And that VoIP carrier worked on your cell phone and your home cordless as well. That's what I'd like.

Re:Welcome to dumb pipes.

[bemymonkey]

Welcome to yesterday. Sipdroid or some other SIP client on your phone and a router with SIP that allows you to connect a phone, et voila. Even works over 3G...

Re:Welcome to dumb pipes.

[LWATCDR]

No reason why it couldn't except why have a home cordless? Cell+wifi+VIOP= home cordless.

Re:Welcome to dumb pipes.

[jandrese]

It's true that the consumer would benefit greatly from an open market like that, but do you know who doesn't particularly like the idea of being a commodity? Every cell phone company. That's why it's not going to happen.

Re:Welcome to dumb pipes.

[omnichad]

And you get get a data plan without voice? Where?

Re:Welcome to dumb pipes.

[omnichad]

Because cordless phones have caller ID with NAME (without inputting the contact into an address book - seriously, why hasn't the cell world caught up on this?), are nicer to hold if you hate bluetooth, provide a secondary phone when your battery is dead, and because I already paid for a cordless phone. They also stay cooler to the touch during a longer call. I actually have 2 cordless and 2 corded phones on VoIP, and 2 SIP phones at home now (for just my wife and I). I much prefer them to a cell phone. They're super-cheap, too, by comparison.

Re:Welcome to dumb pipes.

[bemymonkey]

I'm on prepaid (Germany)... 15€ per month for 5 gigs, tethering allowed, VoIP too.

I'm sure you could find a plan that's meant for 3G modems and just use that as well :)

Re:Welcome to dumb pipes.

[omnichad]

Not in the US. Way more expensive. Cellular anything is too expensive here. My wife and I each pay $30 for every two months for 300 minutes of prepaid voice. I pay $16 each month for VoIP. Our combined phone costs are $46/mo. but that's the best we can do.

Re:Welcome to dumb pipes.

[TooMuchToDo]

T-Mobile: http://www.t-mobile.com/shop/plans/mobile-broadband-plans.aspx

2GB for $40/month (2G speeds after specified data limit)
5GB for $50/month (2G speeds after specified data limit)
10GB for $80/month (2G speeds after specified data limit)

I'm on their $50/month unlimited plan (talk, text, data). Sure, it throttles down to 2G speeds after 2GB of data. So? Planning on buying the Galaxy Nexus when it launches, and I can live with those restrictions for $50/month.

Re:Welcome to dumb pipes.

[omnichad]

And that 2GB plan nearly surpasses the combined cost of two prepaid cell phones and VoIP at home for me. Last I knew, T-Mobile only covers the cities well. I drive a lot in the in-between areas. Without VoIP, I only occasionally want maps (could buy a GPS) or shopping comparison (monthly fee probably outweighs the shopping cost-savings).

Re:Welcome to dumb pipes.

[TooMuchToDo]

Sooooo $40/month is too expensive for you? If so, mobile broadband of any kind is probably too much for you (except perhaps a 200MB/month plan; ATT may have that).

Re:Welcome to dumb pipes.

[bemymonkey]

Well that sucks. I've been wondering where I'll be able to get a dumb pipe in the form of a SIM card next time I visit the States, but it looks like I might just have to rely on wifi :(

Re:Welcome to dumb pipes.

[omnichad]

Exactly right. I only have minimal needs away from home, and $40 is just not a good value for the money, especially compared to the low usage I'd have.

Re:Welcome to dumb pipes.

[omnichad]

The cheapest prepaid "dumb pipe" is probably around $25/mo. And you typically can't buy just a prepaid SIM here. You usually only get that with the device. It's great here, huh?

Re:Welcome to dumb pipes.

[bemymonkey]

That sucks :(

I have a whole box full of prepaid SIM cards (one or two per country) that I've picked up in Asia and Europe, pretty much all of which provided cheap mobile data at decent speeds (i.e. fast enough to support VoIP within the city limits)...

How much is the device you need to buy in order to get the prepaid SIM you're referring to? How much data does that $25/mo buy?

Re:Welcome to dumb pipes.

[omnichad]

Well, a device like the MiFi will run about $100-150 new. They're not cheap devices. And of course it would come with a carrier-locked SIM. You MIGHT be able to get buy with buying a cheap $30 phone, and putting the SIM in an unlocked data device (and changing the plan to match). I have no idea. I've never known anyone that had to try.

Re:Welcome to dumb pipes.

[bemymonkey]

I don't know about having to try, but I'd sure as hell feel compelled to if I had no other prepaid options... the situation seems very tourist-unfriendly. Then again, you have far more open WiFi networks, so it might balance out... those are pretty rare here in Germany.

Re:Welcome to dumb pipes.

[omnichad]

Definitely - most hotels, and most McDonald's locations are the best bets. And often, you can use hotel wifi with no codes - just park outside.

Re:Welcome to dumb pipes.

[bemymonkey]

That really is reassuring. Here the router/pipe owner is responsible for any and all traffic, so if someone logs in and downloads kiddie porn or anything else illegal, the owner is screwed - doesn't matter if they left the AP open. So... not many open hotspots. And the ones in commercial establishments are often quite expensive - 10€ an hour. Last time I paid that much for WiFi was on an intercontinental flight in 2006...

Re:Welcome to dumb pipes.

[omnichad]

There are plenty of hotspots out there like that as well, but it tends to cap out around $10/day.

SMS at Hubble data rates

[quixote9]

just shouts "more money than brains." It was on /. a while back. (! yr? 2 yrs? more?) Somebody costed out what people were paying for texting, and on a per-byte basis, it cost more than what NASA paid to communicate with the space telescope. I never could understand people putting up with that. Voip + wifi for me since about 2005.

Re:SMS at Hubble data rates

[what2123]

I remembered this also and had to go find it; http://science.slashdot.org/story/08/05/12/1419204/sms-4x-more-expensive-than-data-from-hubble

And this is the REAL reason for Data caps -at home

[denis-The-menace]

1-Imagine if people could get unlimited data plan not for their Smartphone but at home.
2-Imagine if many (not most or all) people offered limited but free WIFI to Cell phones. (Don't ask how, just follow me on this)
3-Few people would need a data plan at all on their SmartPhones
4-Cell phone providers would have to lower their rates or die.

However, with great corruption comes draconian laws.
Therefore, cell phone providers have little to fear.

Re:Good for several reasons

[alexandre_ganso]

There IS NO channel load for SMS. Every time you phone says "hello, I'm here", it receives an equivalent of an ACK with SMS WITHIN THE SAME PACKET.

So you can receive as many sms as times as your network knows in which antenna you are, without using a single extra byte from them, because that would be zero-filled otherwise.

If there is such a thing as an immense scam right now, it is SMS.

Good!

[RazorRaiser]

Fuck 'em! They get what they deserve. Maybe one or two might even learn to charge a fair prices.

Re:Good!

[Yaddoshi]

Agreed. Not a tear will be shed for the US cellular cartel.

They just add data plans to make up for it!

[cs668]

T-Mobile added a per MB data plan to my service when I specifically set up my plan 2 years ago to have no data component. I told them that I did not what my phone to be able to access the Internet and surprise me with charges. Everything was fine until me last bill, when I had $40 of data charges. They had added an on demand data plan to my service and like any good smart phone when it couldn't get wifi it went ahead and used the mobile carrier, and racked up a big bill. I think that is their way of upping revenue.

Re:They just add data plans to make up for it!

[Lumpy]

Your phone should have the ability to turn off Cellular data, even the super locked down, anti-freedom, hate the users (I'm quoting android people here) iphone allows that.

I turn off cellphone data on my iphone a lot of times. All i can afford is the 200MB plan, which is a rip off, but they force it upon you if you have an iphone... I guess they kill puppies if you use one without a data plan..

Re:They just add data plans to make up for it!

[cs668]

It can turn off data over cellular. Funny thing is that also turns off non text parts of MMS messages.

Since I specified a plan with no data component and even asked them if I could accidentally access the Internet and incur data charges and they said no I was really surprised when per MB data was added to my plan and I was charged. I know at least 5 people that were effected in the same way, it's just really unethical as a business practice to lie to your customers.

Re:They just add data plans to make up for it!

[stephanruby]

Did you complain? And did you get that charge erased? Don't let them think you're an easy mark, otherwise they'll just find another way to over-charge you for no reason.

Re:They just add data plans to make up for it!

[cs668]

They tried really hard to pin it on me and told me I changed something on my phone and that by using their data service I was agreeing to pay it. They lied and said they added nothing on my plan, but there was a new "by the mb data" service on my plan. After I called and complained, for 40 minutes and up the management chain, they put a new service on my plan "block on demand data" both of those items had never been on my plan before - but I changed something on my phone - Yea right!!! Asshats. So I can choose between cellular carriers that illegally send all of my data to the government and get retroactive immunity from prosecution or one with bad billing practices. Oh wait T-Mobile is getting bought by one of the law breakers, never mind I have no choice!

Re:They just add data plans to make up for it!

[Man Eating Duck]

Since I specified a plan with no data component and even asked them if I could accidentally access the Internet and incur data charges and they said no I was really surprised when per MB data was added to my plan and I was charged. I know at least 5 people that were effected in the same way, it's just really unethical as a business practice to lie to your customers.

Why on earth are you still a customer? Just curious.

Re:They just add data plans to make up for it!

[cs668]

Yes, for now. I'm trying to way my options, wondering if the devil I know is better than the devil I don't know. I will not give my business to AT&T because of the whole telco immunity fiasco, and I want a GSM carrier so that does not leave me many options. Of course T-Mobile might be a part of AT&T soon anyway. This all happened Friday, my wife is due any second, after the baby is born I will have some time at home to find a new phone company.

Re:They just add data plans to make up for it!

[Man Eating Duck]

Yes, for now. I'm trying to way my options, wondering if the devil I know is better than the devil I don't know. I will not give my business to AT&T because of the whole telco immunity fiasco, and I want a GSM carrier so that does not leave me many options. Of course T-Mobile might be a part of AT&T soon anyway. This all happened Friday, my wife is due any second, after the baby is born I will have some time at home to find a new phone company.

Good luck! The reason why I asked is that I'm currently switching providers because of scummy behaviour by my current one. I bought a phone on 12 monthly payments, to my direct question "These monthly payments will end automatically after a year?" they answered yes. Well, they went away - and was replaced by a "monthly fee" for exactly the same amount, but the plan still had relatively high call charges. My online banking service happily paid the bills for me for a couple of months before I noticed. When challenged the support person agreed that it was "maybe not very intuitive" but that they could not reimburse me. I told her "Fine, I'll just switch providers", and they suddenly managed to reimburse me anyway. I'm not giving them any more business regardless, and my new plan with another provider is a better deal anyway :)

In short, punish scummy behaviour by giving your business to someone else if you're able to, and let the scummy provider know why you did so. For any Norwegians out there: stay away from Tele2, I've had very good experiences with Chess earlier and will be switching back to them :)

block em

[P-niiice]

Terrorists could plan the next 9leven using these unregulated, open-to-crime services. Best to limit them now.

Re:block em

[afidel]

You think ichat isn't CALEA certified? How cute.

Re:And this is the REAL reason for Data caps -at h

[hawguy]

1-Imagine if people could get unlimited data plan not for their Smartphone but at home.
2-Imagine if many (not most or all) people offered limited but free WIFI to Cell phones. (Don't ask how, just follow me on this)
3-Few people would need a data plan at all on their SmartPhones
4-Cell phone providers would have to lower their rates or die.

However, with great corruption comes draconian laws.
Therefore, cell phone providers have little to fear.

Part of what you're asking for is already taking shape - a cell service provider (well ok, reseller - I think they use Sprint's network) leveraging Wifi to sell an unlimited everything cell plan for $19/month:

http://techcrunch.com/2011/11/07/republic-wireless-officially-unveils-19month-service-unlimited-everything-no-contracts/

The catch is, you have to do most of your calls/text/data while on Wifi and (for now) it only works on their specific phones. They'll drop you if you start using significant cellular network resources.

But it sounds like a great plan for me, where most of the time I use my phone I'm either at home or work where I've got good Wifi coverage, but when I'm on the road and need to pull up a Google map or make a call, I still have the cellular network to fall back on.

Re:AT&T charges me $5 a month-- now $20

[DocSavage64109]

I tried to subscribe to the $5 AT&T plan a couple months ago only to find out that those plans are gone and replaced with a $20 unlimited texting plan.

5000% Markups don't last forever?!

[Moof123]

Perish the thought that folks would find a way around highway robbery!

And Yet....

[Lumpy]

I can not find ONE person on this planet that feels bad for them.

Gouging for SMS messaging costs, Gouging on Data costs, etc...

Boo fricking hoo Cellphone companies..... I'll throw a pity party in your honour this holiday season.

did they

[geekoid]

remove things that people wouldn't be doing through normal carriers? Since it's free or super cheap, many epople are making calls that wouldn't have normally made.

I may Skype with my friends while gaming, but no way would I call them on a 'party' line.

Re:Good for several reasons

[schwaang]

But they have to make up for the cost of billing you for it somehow....

Re:So?

[BitZtream]

Nor would there be a reason for people to make any sort of progress.

No shit, and unlimited data plans are going away

[BitZtream]

Is this a surprise or revelation to you guys or something?

They are going to get paid for the service, you're going to pay them, its just a question of how the data gets to you.

If everyone switches to using massive amounts of data ... they'll stop making data unlimite.. ... wait ... whats that? It already happened? Fuck. Good thing I'm grandfathered in :)

Dear Carriers:

[IGnatius T Foobar]

Dear Carriers:

What you want the least, is what your customers want you to be the most: a dumb pipe.

Please get out of our way.

Sincerely,

Your Customers

Re:And this is the REAL reason for Data caps -at h

[realityimpaired]

When I was looking into what was the best option for me earlier this year, I wasn't able to find a VOIP codec that used less than half a meg per minute. Things may have changed, but I'd be surprised. Ultimately, it made more sense for me to get a 150 anytime minutes with 5pm eve/weekend and unlimited domestic LD plan for $25/mo than to pay for the data. :)

Re:And this is the REAL reason for Data caps -at h

[tepples]

Would the list of people offering free Wi-Fi include operators of public bus services?

Re:And this is the REAL reason for Data caps -at h

[GiMP]

This plan would work incredibly well... in San Francisco where there are tens of access points accessible from any given place you might be. This would work horribly in the suburbs. Hell, it would work terribly in the residential areas of large cities where there would be enough density for this to work, but where people are too poor to have wifi (thus lowering the effective density of the mesh network).

Re:Good for several reasons

[TWX]

Heh...

What's sad is the modules that had to be written to collect and sort the SMS data to derive billing information probably were paid for in the first week of their use...

Re:AT&T charges me $5 a month-- now $20

[optimism]

Wow, that sucks. Hopefully they kept the $5 plan, and just don't publicize it.

I see that their other option is $0.20 for a single text, and $0.30 for a single photo/video message.

I think we can assume that AT&T does not lose money on any of these services. So since a text message is about 1000x smaller than a photo/video message, that means it should really cost less than $0.0003 per text...33 texts for a penny...3300 texts for a dollar.

But you know, whatever the market will bear...

Re:And this is the REAL reason for Data caps -at h

[TooMuchToDo]

Wifi at work? Check. Wifi at home? Check. Wifi at houses of friends? Check. Problem?

Turn on Google Maps Location History services; wait for it to collect data. You'd be surprised how little time you spend elsewhere besides home, work, etc.

With regards to poverty, Comcast has a $15/month cheapie plan if you qualify based on income.

Re:And this is the REAL reason for Data caps -at h

[mariasama16]

It depends on the suburbs/residential areas. Apartment complexes are great places to find lots of wi-fi networks (and annoyingly, my complex have savvy enough people to have spread across all the available channels), but some of the ritzier sections of town (I'm thinking of a place here in Cincinnati where the minimum lot size is in the couple acre area) would cause more problems than the poor sections of town, due to density.

Business model

[crossmr]

I'm surprised things like SMS message plans and long distance plans have survived even this long.
Before skype was a small threat to long distance plans. It was alright, but you often had to be tied to a computer, or buy a special phone or wireless headset to use it more freely.

However, with the explosion of the smart phone market,, skype and other programs like it are everywhere and extremely convenient to use for the end-consumer. I haven't had a home phone in years, but even if I had one, I certainly wouldn't be calling anyone long distance with it.

calling cards have become almost unnecessary for normal day to day use.

Re:Good for several reasons

[swalve]

People keep saying that, but I see no evidence of it in anything technical I see. I find it dubious that the phone company uses fixed packet sizes in their control channels that were just filled with a bunch of zeros until someone came along to use those zeros up.

Re:speaking of blackberry...

[taylortbb]

Don't expect Android to be loaded onto it, RIM has always used very secure locked bootloaders.

On the upside, OS 2.0 already has MKV support. It's in the developer beta.

nobody feels sorry

[Tom]

Nobody feels sorry for the carriers, that alone should tell you something:
a) they provide an essential service
b) in a way totally different from what people actually want

I'm with O2 Germany at the moment, and if you sign up with them, you are insane. I'm with them because I used to work there, well actually at a company they bought - I left when I got the chance.

I'll be back with T-Online at the first opportunity I get. O2 was bombarding me with advertisement for all the special things that I don't give a rats ass about until I told them to stop harassing me - and then they called three weeks later to ask if I still don't want to be contacted. I know how they work, so I knew the lady on the other hand couldn't be blamed, she had just received a list of customers to call today. But I basically told her to put "will take legal steps if we ever contact him again without explicit permission" into the customer details. Has worked so far.

Yes, as an insider I know as a fact that the business plan is basically to get you to sign up to a cheap plan and then proceed along two paths:
a) up-selling - upgrading your plan to more expensive versions by telling you what great things the "better" plan offers. Needless to say, they don't care a bit if you actually need it. The customer service people are paid on what they can sell you, not on how good they match your actual demands.
b) "added value services" - all the crap nobody cares about they try to sell you. Basically, the old AOL business modell: Take the Internet and "add value" to it. Which, of course, is utter nonsense in itself if you think for even a second about it.

SMS is originally a part of b) though it has become so common and so massively profitable that it's changed its character.

Carriers fear nothing more than becoming just carriers again. Their business models are unsustainable if that should happen. There is a ton of assumptions that the top management is blindly following that are based around this not-just-carriers model. That's why they're fighting so hard against anything that would turn them into just carriers - they have no idea how to handle a world in which they were. Everything from employee numbers to price calculations to the company structure is based on a specific model of the carrier.

Re:Good for several reasons

[alexandre_ganso]

Seriously? Wikipedia is your friend.

http://en.wikipedia.org/wiki/SMS#Technical_details

Re:Good for several reasons

[swalve]

Maybe I'm blind, but all that says is that the message length is constrained to a certain size by the protocol. Doesn't say that the protocol is fixed at that length.

Re:speaking of blackberry...

[rikkards]

Don't expect Android to be loaded onto it, RIM has always used very secure locked bootloaders.

So did the PS3 :) However I don't know how much of a demand in general there will be compared to the PS3 so you are probably right.

On the upside, OS 2.0 already has MKV support. It's in the developer beta.

Sweet, that is one of the big annoyances for me with it since majority of my stuff is in mkv. If they fix that the only other thing I would love is the ability to run videos from a network share.
  I picked one up on Thursday and had it price matched yesterday. Response on it is quite slick and the OS isn't bad. Miss a lot of the gesture functionality that you get with Android but I am not heartbroken especially with the February patch (assuming it turns out ok).

I am actually quite happy with the size. Although the larger size would be good with things with small fonts (i.e. comic books), full screen video is fine and I could see holding a larger screen for a long time (and typing) would get tiring. The lack of (decent) apps is probably the biggest detractor but that comes with time assuming this huge selloff works for them. If I hadn't been able to get the 16G, rather than getting the 32 for $299 I would have got the Lenovo for $369 (which isn't even on sale and I feel there is a catch with it somehow). The extra $70 would have been worth getting Android. The 16G at 199 isn't as sweet of a deal as the HP Touchpad was but it is definitely a good price for the Playbook now especially for what I primarily bought it for which was an ebook reader and web browser

SMS #1 ripeoff

[theangryswede]

$.25 for 160 bytes... right... It is the #1 most overpriced way of data transmission on the planet.

Verizon profit isn't that much

[OeLeWaPpErKe]

Exactly. What people here don't realize is carrier profit per customer ... which is of course the maximum amount they could drop your bill without significantly cutting your service.

(numbers from http://www.totaltele.com/view.aspx?ID=466491 )

Avg. revenue per user $54.12 (/month)
Number of users 70 million
Verizon profit per month 2.37/12 * 1000 million = 197.5

Profit margin per customer per month : $2.82.

This is the same as with people complaining about gas price and "record profits" for the oil companies. Those boil down to about $0.3/gallon. That's a record high.

Re:AT&T charges me $5 a month-- now $20

[rakaur]

They did this because of iMessage, almost certainly. They announced it right after Apple announced iOS 5's features.

I gave up using SMS

[GonzoPhysicist]

I gave up using SMS when I found out it was cheaper to send data over Iridium satellite, and I can send them out from 300Km off shore!

Re:speaking of blackberry...

[narcc]

It's definitely worth that price. However the original for 500 it definitely isn't

Why? It has the most advanced mobile operating system on the market, hardware that is top-of-the-line, and a brilliant and innovative UI. Bridge even negates the need for an additional data plan when on the go.

The only complaint I've seen about the PB was the lack of native email -- which is a complete non-issue for blackberry owners (who would just use bridge anyway) and most consumers (who'd just use web mail like they do on their computers). Besides, if you really need it, there are a number of third-party apps. No on criticized the build quality, the UI, OS, or the hardware specs.

You get a lot more with the Playbook than most other tablets at that price point. $200 is a steal.

Now someone needs to hack android onto it :)

Why? You'd be giving up so much to gain ... what, exactly? More apps? Kind of silly, as you can already load many (most?) Android apps now if you're willing to put in a tiny bit of effort (BBH-Tool does it in one click) -- or, you know, just wait until February.

magicJack to the rescue

[hesaigo999ca]

I was using skype on my iphone but was getting so much latency problems....then i found magicjack, this one is much better quality...uses less resources and lets you call real long distance numbers without needing an account nor needing to pay.

Goog job magicJack