How come text messages now cost 20¢ each, when they used to cost 10¢ each?
That’s what Democratic Senator Herb Kohl of Wisconsin wants to know. Acting as head of the Senate Antitrust Subcommittee, he recently sent a letter to the presidents and CEOs of AT&T, Verizon, Sprint and T-Mobile asking for clarification as to why text message costs have gone up 100% in 3 years… especially since the wireless carriers have been pushing data plans like there’s no tomorrow.
Let’s break it down, shall we?
My girlfriend’s boss recently purchased a laptop with built-in Wi-Fi and mobile Internet. Wi-Fi is, of course, free in most places, but mobile Internet requires a data plan from a cellular carrier. So the boss signed up for a 5GB/month data plan from Verizon. It costs $59.99 a month. That’s 1.1998 cents per megabyte, per month.
Text messages are limited to 160 characters, which is 160 bytes. Assuming that one sends the full 160 characters per each text message, and those messages cost 20¢ each, that’s $1,310.72 per megabyte. So if Lisa’s boss were to send the same 5GB worth of data via SMS instead of her mobile Internet plan, her monthly bill would be (are you ready for this?) $6,553,600.
Of course, 5GB of text messages would be around 33,554,432 texts per month, so that’s not a very realistic analogy. And most people that text a lot usually have some kind of “text messaging plan” from their carrier, which drives the cost down a bit. I’m also not comparing apples to apples, as the data plan I quoted is from Verizon and the SMS costs are from AT&T.
But still… that, my friends, is highway robbery, pure and simple. For some reason, the wireless carrier have seen fit to charge insanely high rates for text messages while at the same time they’ve cut costs for voice plans (even a ten-second voice call uses far more bandwidth than a text message). It’s insane, and I wish someone would do something about it. Sadly, it looks like it might be Uncle Sam instead of the market in this case.
Read more about it at Ars Technica here.