The True Price of SMS Messages | Hacker News Reader

The True Price of SMS Messages

gthing.net

33 pointschaostheory43 comments

"SMS messages are transfered over air made of solid gold."

Hahaa, brilliant!

So that's why I've been paying insane amounts for texting...

@ breck: I have semi-unlimited texting with Verizon, it's free to send or receive from Verizon customers (which is why I got it, I was tired of yelling at my friends for sending me texts like, "im bored. whatre you doing later" and "idk my bff jill?"--almost all of them have Verizon). It is exactly ten dollars a month right now, and I only get a hundred or so texts to and from other companies. A truly unlimited texting plan is somewhere in the area of $50.00 a month, I believe. Don't quote that, my internet is being ridiculously slow and I'm not about to wait for it to load the Verizon Wireless page to check.

@ tptacek: I may complain about Verizon, but it's only because I love them. Why, you ask? Two reasons. One, my close friends all use Verizon, so texting them costs me nothing, and costs THEM nothing as well. Two, I have brand name loyalty and know it. It is MY network and so, logically, it is better than everyone else's.

Haha.

Seriously though, if there WAS a better network I could switch to, as well as have all my friends and family switch to, I would do it in an instant. The problem that I have right now, is that even if I were to pay less money, switching over to something like Cricket, my friends would all end up paying MORE money because I'm no longer on their network. Which probably means that while I have unlimited texting to whoever I want, no one will want me to send them messages, because it's costing them money. And if no one is sending me messages, and I am not sending anyone else messages, what is the point of having unlimited texting?

I just dropped Verizon, and they have a plan for 10 dollars a month, unlimited texting to and from any network. Where'd you get the $50 number?

(Aside: It's probably better to just do multiple replies to the people you're responding to directly than to create a new comment with @ replies.)

Once again, with feeling: goods and services aren't priced based on their cost to the provider. They are priced based on what the market values them at.

Analyses like this are silly. The marginal cost of a single SMS message is effectively zero. Why compare them to ISP rates? Those are arbitrary too. Take the argument to its logical conclusion and SMS should be free. I agree!

The fact is, this kind of calculation shows how absurd the mobile market is in the USA. So much for claiming that it's a "free market" and it is "competitive".

I would be interested in seeing you defend this argument. What's better about your favorite mobile market?

Here in the UK, it's better, but not by much. I remember reading a study a while back that historically, the UK mobile costs tended to be lower than elsewhere in the world.

My defense is this: as the cost of technology is constant going down, we the customers are not seeing any corresponding drop in costs. And that with the introduction of new operator (called 3 Mobile). In my mind, such a competitive market would transfer these savings to customers.

Examples: A 200-minute (ish) any time any network plus some included texts price plan has stayed at around £25 for the past 6 years. More recently, they started experimenting with 18-month plans. These tend to give much better call and texting costs but when you factor in the "free" phone, they sometimes end up costing more than a comparable 12-month plan.

Price needn't track cost, especially in technology. Services are often deployed with low margins for the provider, with the expectation that margins will drop over time as technology gets cheaper.

Consumers benefit from this if it means they get access to new technology at a lower price than they would if margins were held constant.

In a competitive market, margins would be squeezed. It would be hard to keep them constant, let alone increase them.

Which is problematic when to have the market in the first place, huge investment in infrastructure has to be made.

Most phones these days can use the web. Theoretically they can bypass this all on a data plan and send text messages as large as you want via email/apps/etc. At a minimum this gets around sending costs assuming you can find a site service that will send for free.

they need something like EU, which puts good regulations on hold. Carriers used to charge lots of fees for calls made out of your country, and I think EU is putting an end to that extortion.

Sure, you have the "free markets" types that say eventuall something will rise and sidestep SMS, but that's now going to happen. In this case free markets, with no proper regulation, just create an enviroment where the carriers can collude, and milk every cent from you.

I'm not sure more regulation is the way forward though. Maybe in the short term, but certainly not long term...

Ideologically I agree with you, but regulation seems to have worked well in the EU.

Ditto. A perfect market wouldn't need regulation, but we're far from a perfect market. The barriers to entry (both financial and regulatory) means that there isn't much competition, so regulation can help. Regulation isn't perfect, but neither is our implementation of the market.

The solution to the barriers imposed by regulation is regulations?

I'm reminded of the "danger, low sign" sign.

Simply can't understand how you could be charged for incoming SMS. That is just perverse. Who would get a phone like that??

What choice do you have? All the carriers charge like that so I don't really have an option.

I wish one of those companies would just stand up above the rest and not suck. They are all so shitty. All the new phones in america suck. I'm still using a super old nokia and I was going to upgrade it, but all the phones at the store were all pathetic. At least congress made it easy to switch to a new carrier because of the number-portability bill.

I'm with verizon right now, who generally have a great network, but I would drop them in a heartbeat if something better came around. However i hear nothing but bad things about AT&T (nee Cingular) and sprint usually doesn't have the best coverage, although I have thought of switching to them because they have some great plans. T-Mobile isn't any better either.

"What choice do you have?"

Move to Europe.

On a more serious note - I think this is probably one of the main reasons that the Scandinavian countries are ahead in the mobile game. You can get cheap plans that include an unlimited amount of text messaging, most people don't have landlines anymore, and quite a few use their phone as their only means of hooking up to the Internet - you can get 7 mbit and free traffic pretty cheaply with your 3G phone.

I noticed a few of the startups mentioned here that did wireless stuff that we've seen years ago over here - there has even been a story of a startup that did a wireless location service, and was touted as super-smart and innovative. A friend of mine did the exact same thing over here back in 2003.

Unfortunately we have a small home market, a broken investment system for startups, and are terrible at selling ourselves. So we don't do well on the international scene.

"I think this is probably one of the main reasons that the Scandinavian countries are ahead in the mobile game. You can get cheap plans that include an unlimited amount of text messaging"

I'm from Scandinavia and this isn't really the case. Data is more expensive in Sweden than in US. The US market has done a lot to make it easy for people to use data on their mobile phones. Sure, we have advanced phones in Sweden but that's about it.

Some countries with cheap data-plans for mobile: http://gammalife.blogspot.com/2008/02/pricing.html

Interesting - there might be differences across the waters. I'm from Denmark.

I agree with you on all counts. But there is a curious business model that is opened up by the US's draconian SMS arrangements, and that's free digital integration.

Companies like Swaggle, 3Jam, Twitter, and Dodgeball all get full cooperation from carriers because they encourage MORE received texts. If carriers didn't charge for received texts, these services would be creating situations where the users save and the carriers lose. (At least at first. You can probably successfully argue that Dodgeball and Twitter eventually encourage the users to send more texts once they're naturalized.)

But as it stands, cheap SMS integration into web apps is a boon for startups with a mobile twist.

(That being said, carriers are still running a cartel in the US...)

Yes, moving to Europe is a sensible alternative to paying 15 cents per incoming text message.

Moving to Europe is a sensible alternative period. ;-)

I've lived in Europe and Cell phones weren't that much cheaper. In fact, I spent much more on my cell phone bill. Granted I lived in germany, but their voice plans all really sucked, way worse than in the states. Most plans were like .25 cents to call a mobile line and .10 cents to call a landline. And in germany it costs 20 cents to call a mobile phone from a landline - that really sucks. I don't have any experience outside of germany, but it sure wasn't any better there. Just different - better in some ways and worse in other.

I'm on a Sprint SERO plan, which is their employee referral program: http://www.sprint.com/sero

They opened it up to the public after the iPhone came out. so you can use this address to signup: savings@sprintemi.com

I pay about $34 a month for 500 anytime, unlimited n/w (nights start at 7pm), unlimited data, and unlimited texts.

Unlimited texts aren't part of the plan, but if you ask for it after signing up they should give it to you.

I've never had a problem with Sprint's network.

Details: http://wiki.howardforums.com/index.php/SPRINT_SERO

This is the cell phone plan to get.

The problem is that you have to get a phones sold by Sprint which sucks.

Sim-cards is a great invention. Compare with computers, imagine if you bought a computer from Dell that would only be allowed to run on the Dell-DSL network and only allowed to run Dell-approved software. Not a great deal

True. Another problem is that the rest of the world uses GSM, so if you ever want to travel outside of the US you need a GSM phone.

Yes, every time I get a phone call or receive an sms I miss the uk. There's a huge lack of choice here.

On the plus side I rather like the fact that in the US the person with the cell phone is charged for the mobile part of the cost.

E.g. the call cost is made up of core+wireless component. The caller pays for the core cost regardless of number type called (excepting premium and free). The person who causes the extra expense of the wireless hop has to pay for it.

I'm a bit disappointed that he didn't include IPoAC (IP over Avian Carriers) in his comparisons.

Sure it is high latency, but the bandwidth is killer.

http://en.wikipedia.org/wiki/IP_over_Avian_Carriers

Wow, that made my day. Thank you.

I'm amazed they got 4 of the 9 pigeons to actually return the ping.

Hm, that inspires me to another idea: maybe smoke signals could be revived, if they could be automatically picked up by weather satellites?

I wonder at what resolution and frequency the world is being scanned by satellites these days? I often wonder how to help people in war countries. For example Tibet at the moment: communication channels are being shut down, how could one provide people with simple means to get a message out to the world? Could smoke signals be a solution?

One problem is that I would not like the sender of the message to be detectable by the enemy. Not sure if that is solvable at all (certainly not with smoke signals).

I've come to the conclusion that the carriers are our generation's Big Blue.

You need to work with them (like Microsoft did), but really, they're stifling creativity and I don't think anyone would be sorry to see them lose some of their power.

I find it ridiculous that they charge for incoming text messages, especially as SMS spam is beginning to be more prevalent. As if spam wasn't annoying enough already I now get charged for it? I predict lots of class action lawsuits if this continues.

For comparison: in Uzbekistan, outgoing SMS message costs 2c and all incoming messages are free.

I guess 2c is really a lot more money to the local economy though?

I also enjoyed a reference to Uzbekistan that wasn't the end of a joke ;)

It depends. Unfortunately, we have a huge gap between poor people and those of us who can afford a little bit more.

So 2c per message is cheap and SMS is quite popular here. However, it is still cheaper to call than to have an SMS chat because, for example, I pay 2c per minute for both outgoing and incoming calls.

If you are interested, here is an information page from our biggest operator: http://www.mts.uz/eng/abonents/tarifs/

(I use another company but its website has no english version)

Unlimited text messaging plans are a couple bucks a month.

Yes the mark up is huge, but it is used to offset costs elsewhere in the network. The money is used to build and maintain all those tower sites, pay for the expensive 3G licenses and subsidise handsets.

We need a hack that sends text messages over the voice connection.

Insane!

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