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Expert Says Text Message Mark-Up Is 4,900 Percent

Canwest reports that a Canadian researcher has told a U.S. Senate committee that the major telcos mark-up the cost of sending a text-message by as much as 4,900 percent.

7 Comments

  1. I came to the same conclusion
    I came to the same conclusion when CBC Search Engine talked about SMS pricing (back in January). About 0.33$ per 1000 messages if SMS was priced just like a 40$/400minutes plan. (byte for byte comparison)

    I detailed my math here: http://ve2dmn.blogspot.com/2009/01/cost-of-sms-in-canada.html

    I guess these prices are the ‘cost’ of ‘competition’ here in Canada…

  2. collusion
    David, I believe Industry Canada and the telecoms refers to it as “Market Forces”.

  3. Based purely on the cost of the bandwidth, sure it is about 33 cents per 1000 messages. Add in the cost of storage and infrastructure to store and forward the messages, then it goes up… I guess they need all that extra cash to pay for the store and forward system. After all, that would bring it to about 34 cents per thousand 😉

  4. The only technical limitation / cost I wonder about is the number of cell tower connections available at a given time. Text messages are next to no bandwidth, but they still have to establish a radio connection with the cell tower the same as any other call.

    Other than that, I can’t imagine storage or other infrastructure costs having a whole lot to do with it. Text is microscopic in digital storage terms, and surely infrastructure has more than paid for itself by now.

  5. Honest John says:

    Wakey,wakey – Competition Bureau!!!!!
    Or are you already brain dead?
    Or maybe you are too busy keeping gas prices honest 😉
    As if!

  6. Also see surfer’s “The SMS ripoff”
    on p2pnet:

    http://www.p2pnet.net/story/23046

  7. Transmission Cost
    Actually the transmission cost itself is Zero! SMS was invented by some smart Dude who realized that there was some free space (160 Bytes) in the control messages exchanged by cel phones and cell towers about every 30 seconds. The control messages is used to track the phone location in order to route receiving calls to the proper cell. So SMS does not involve any transmission that wouldn’t of occured anyway.