Why am I required to pay for both text *and* data. Is it a scam?

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I reckon his calculations are ballpark as they echo my own similar experience when as far back as 1999 I did a rough comparison between the costs[1] of local SMS messages and that of NASA receiving messages from its Voyager spacecraft billions of kilometers away.

My calculations show that on a byte-for-byte basis it cost kids several orders of magnitude more money to send [to text] a single character across a schoolroom than it does for NASA to receive the same message from its Voyager spacecraft as they approach the heliosheath--that boundary where edge of the solar system gives way to deep space some fourteen billion kilometers from earth.

The SMS service was originally devised as a quick and dirty maintenance channel for field use by technical staff to adjust and maintain mobile telephone networks--not for general use by subscribers. Well, that was until the telcos realised they were sitting on a goldmine and they could ACTUALLY sell the SMS service to subscribers. Moreover, this twee, almost-unacceptable, almost-unusable and awkward communications system with its strange and kluged way of keying in messages, was extremely easy to sell to a remarkably gullible and unquestioning public who lapped SMS up no matter what outrageous and extortionate price the telcos charged. For the telcos, SMS was the telecommunications equivalent of heroin, the public, world wide, became addicted overnight.

Had SMS been initially planned as a consumer service then it would have been much more extensive than it now is. The telcos just couldn't believe their luck: for almost negligible establishment costs they've made billions. And, on a dollar-for-effort basis, they've made even more money than Bill Gates and Microsoft.

Moreover, the world's telcos are all very aware of the SMS goldmine they're sitting on. Thus, they're forever engaged in seemingly competitive SMS price wars which, in reality, just oscillate or nibble around an artificial and outrageously high price. No telco is wiling to enter into true price completion in the SMS arena, and no telco wants the secret SMS oligopoly to be exposed. The stakes are enormous.

The tragedy of SMS is that governments, regulators and consumer advocates let these miserable telecommunications carpetbaggers get away with such huge exploitation, it was on such a grand scale. In the broader sense, SMS pricing--which ought to have been included in the base subscriber price with no charge for messages (as the bandwidth is so negligible)--can be seen as another consumer casualty in the worldwide headlong rush that was telecommunications deregulation. Matters, too, were made worse when governments also divested themselves of their telecommunications regulators and engineers, as governments no longer had easy access to professional and independent technical advice (they would have picked up the SMS scam then referred it on for the drafting of appropriate lemon laws and consumer protection legislation).

SMS and its pricing is truly an amazing phenomena. One day when we eventually realise the huge extent to which the consumer has been deceived and conned over SMS, it will go down in history as a quintessential example of what happens when the synergies of corporate greed, marketing propaganda and deception, consumer gullibility and the new and strange addiction of SMS messaging come together. It's what happens when all involved are blinded and mesmerised by technology's new and pretty baubles bangles and beads. With SMS, it is as if the Pied Piper had really come this time.

What is urgently needed now is to expose this SMS pricing sham once and for all. I call on whistleblowers, insiders and those of us who still posses a modicum of rationality and who understand the issues, to leak and expose true and quantifiable figures (not guesstimates) about SMS installation and running costs and the extent to which the public has been deceived and extorted over the years. This information can then be used to force regulators and legislators to act.

[1] At the time, my reason for the calculation was in response to my then unit manager who suggested we use SMS to replace regular telephone conversations. Responding I'd said that SMS is, at best, a clumsy, slow and an inefficient means of communication but he remained insistent but he then dropped the idea when the costs of SMS were compared to that of Voyager's communications.)

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The $5k number is from a WSJ article. http://online.wsj.com/article/SB1000142405297020468320457435...

By the way, text messages are very cheap for carriers. They are sent on a control channel which is also used to establish and hold calls. This channel has to be kept free at all times anyway so the carriers can’t use it for anything else. Text messages are moreover very patient. If the control channel is not available they will just wait.

It might cost a billionth of a cent for a network to handle an SMS, but that's largely irrelevant. If you're running late to meet a friend, ten cents to send a message of apology is a stone cold bargain. If you're a hypersocial teenager, $10 a month is a small price to stay in constant contact with everyone you know. Rates charged for SMS aren't set relative to their cost, but relative to the price of a voice minute - for a short message it is invariably cheaper to text rather than talk, which seems more than fair to most customers.

There's a whole class of high-margin products - SMS, soda, razor blades - that people regard as overpriced when it's pointed out to them, but buy anyway. You could call that a scam, but I just see it as an artifact of the complexities and contradictions of how we think about price and value.

All too often I see startups charging what they think is fair rather than what their target customers are willing to pay. From the perspective of a geek who likes tinkering with technology, any price is too much for something you could hack together in a couple of hours. The average end-user neither knows nor cares whether a piece of software was a trivial bit of scripting or an epic production of Duke Nukem Forever proportions. Their sense of value is calibrated completely differently, based on what they are used to paying for products and services. In many industries, the worst possible mistake is to charge too little. The value of your work bears no correlation to the effort or technical sophistication that went into it. The multi-billion dollar value of SMS is proof positive of that.

The problem will stay there as long as a contender on the market won't try to make a move and give them for free, then the rest will follow to remain competitive. In france I think the standard is (finally) to free and unlimited SMS since a couple of years. I think it's the result of the convergence of internet and old-school telephone, the masses start to realize they can send emails on their telephones with pictures and everything for free when they have to pay for a shorter SMS.

Here in Japan, text IS data -- SMS messages are just e-mail and every phone has a user-defined e-mail address, except for some cheapo phones that just have randomly generated strings.

Data is charged by the packet, with different tiers of pricing; for example, my plan charges by the packet up to a maximum level, at which point I can use everything for that maximum charge, which is around 60-70 USD depending on the exchange rate.

It's definitely a better deal than other countries seem to be getting...

However, I was travelling in a Latin American country recently and was talking to one fellow who worked for the government who had been given a Blackberry Storm (it was the only smartphone I had seen there). I asked him about his data plan; he said he got 5MB a month that he basically just used for texting, e-mailing, and checking Facebook. Apparently this was some kind of combined plan, or he was mistaken one.

And you can reach about anyone with a cell phone with SMS. Most people to not read all their email on the go.

I'm sure many people consider text messaging overpriced, but there's an easy solution: stop paying for it and disable it on your phone. It's simple economics: the price is set by what people are willing to pay.

First, SMS is reliable transport. In case message cannot be delivered, message will be hold in SMSC and receivers' HLR would notify SMSC to reattempt the delivery, as fast as recipient is available again.

Second, SMS is globally routeable. You may visit another country on the other side of the planet, and the message will still be delivered to your phone.

And one weird thing comes to my mind. If SMS are really that overpriced, why noone in Telco world announced really cheap SMS plans? They would instantly win huge part of the market. Is that some sort of worldwide cabal?

On another note, here's some cost analysis from 2008 that doesn't appear to have been linked yet unless I missed it: http://gthing.net/the-true-price-of-sms-messages