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Any business with those kinds of margins just begs to be undercut, and several alternatives are already available. The honeymoon is over for wireless providers and their text message price gouging. In fact, good for them.Īs long as customers continue to value the service even at the super-high prices, why not?īut there seems to be a growing sentiment that the pricing and costs may not be aligned In 2009, Senate hearings took place over antitrust and collusion concerns. Granted, they made big investments in infrastructure to build out their networks, but still.Īnd I have no problem with these companies making money. The average global cost of these messages is $0.11, which would make texting a $700 billion a year industry, at virtually no cost to the mobile providers! Worldwide, there are 2.4 billion texters sending approx. Nice! Text Message IndustryĪ well-deserved kudos to the cell phone industry for turning SMS messages into an amazingly profitable business. Assuming they have a similar cost structure to AT&T, their net cost to deliver your 5000 monthly texts is just $0.008, total.įor which they’ll gladly charge you $20 - giving themselves a minimum 99.96% profit margin. If that is the case (and assuming AT&T still plans to make money on their 2 GB plan), they are openly admitting that their cost to transmit a text message is less than $0.0000016.ĭivided by 140 bytes per SMS = 15339169 texts
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Now I’m not a cell phone engineer, nor do I play one on TV, but let’s assume that the systems used to transmit wireless data (load web pages, download music, stream online videos) are the same systems used to transmit text messages.
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If an average mp3 song from iTunes is 4 MB, a text message is 0.0001335 MB. SMS text messages use 7-bit characters and have a maximum length of 160 characters, making the maximum data size of each SMS 1120 bits, or 140 bytes. That’s a good starting point, but I wonder how much less their cost really is? Text Message Bits and Bytes That means Verizon’s marginal cost of delivering a single text message is less than 4/10ths of a cent. Let’s also assume that Verizon plans on making money even if customers maximize their plan usage. $ texts - $0.004 per text (4/10ths of a cent)Īlso note: the $10 and $20 plans include unlimited Verizon-to-Verizon texting, but for our purposes we’ll just ignore that.īasically it’s a shrewd marketing move. Jack up the price of the a la carte texting to make the still-expensive-for-what-you-get plans look like a better deal. $10 for 500 texts - $0.02 per text … ok no price break there $5 for 250 texts –$0.02 per text (immediate red flag, the price just dropped 90%!!) $0.20 per text - pay as you go ($0.25 for a picture message) On Verizon, text message pricing is as follows: So I did some homework and found out I was right, and it was even worse than I imagined. Connect anywhereĬhoose from more than 50 locations on six continents, and browse the web with a local IP address.I had a hypothesis that text messaging is a huge cash cow for mobile phone carriers a high-value product with virtually no variable expense. Use our specially optimized servers for peer-to-peer (BitTorrent) to upload, download, and share files with high performance while maintaining your privacy. ProtonVPN was created to protect journalists and activists and break down the barriers of Internet censorship, allowing you to access any website or content.
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