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As a group of software developers, I suspect there won't be much sympathy found here. You shouldn't price at cost+, but rather at value+. Many of us work on SaaS solutions, which have little to no marginal cost, yet we charge for the service.

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But what are the fixed costs of SMS? It's traveling over a network that was initially built to carry voice traffic, and is currently expanding to carry data traffic. How much of the network was built specifically for SMS? It really seems like it was something shoehorned into existing infrastructure. I have a hard time coming up with the fixed costs of SMS (at the carrier level; You could always add the cost of phone makers to build in support, but that's not the carrier's job).

Unlike voice, SMS will be stored in a server and in case your mobile is switched off you will still get the message, when you switch on your phone. So, there will be bit extra cost for maintaining these servers.

> Many of us work on SaaS solutions, which have little to no marginal cost, yet we charge for the service.

The cost of programmers to create the product, the cost of servers, system admins, etc. Those aren't small costs.

> Those aren't small costs.

No, but they are largely fixed costs, not marginal ones. http://en.wikipedia.org/wiki/Marginal_cost

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