Mobile SMS: Do you even *know* you’re being ripped off?

For a long, long time I’ve limited my SMS text messaging since it was too laborious to type with a keypad and I — and most of my friends and colleagues — didn’t like being “interrupt driven” and being bombarded by SMS interruptions. It was also ridiculously expensive and I knew it was a ripoff so was reluctant to use it.

Most of us now realize that an SMS is, in many ways, a more efficient and surprisingly less intrusive way to connect with someone. Now that I (and my daughter and some friends) have iPhones and the text messaging is so much easier, I bought her the unlimited SMS for $20 option with AT&T which she goes crazy with as she messages like mad (but they’re raising the price as well…bummer).

Here’s the kicker though: think about how much you pay for unlimited Internet access at home where you probably download hundreds of megabytes (or even gigabytes) of data every month for, say, $50. Ever do the math on how extremely and insanely expensive sending and receiving those teeny, tiny SMS messages are in comparison?  This is why SMS is the “cash cow” for the mobile telephony companies and they’re laughing all the way to the bank, thank you very much.

Now you don’t have to do the math since Sam Garfield did it for you with the true price of SMS messaging and it’s enlightening. An excerpt:

What exactly justifies making SMS messages sixty one million times more expensive than ISP data and 200x more expensive than TCP/USPS? How come technology, communication, and infrastructure is getting cheaper while the costs of SMS messages are increasing exponentially? My theory: SMS messages are transfered over air made of solid gold.

No Sam…they’re charging it because they can and that we haven’t called them on it. It’s posts like yours that will help fan the flames of mobile users getting ripped off for something so minor.

While mobile telephony companies could certainly argue that message queuing and timely transport of SMS messages is expensive, it’s unlikely that they’ll be able to keep charging so much.

This article in TechDirt was telling and had an opposing perspective to Sam’s article and math:

But of course this isn’t really a fair comparison. A commodity internet connection doesn’t afford the ubiquity that a cellular network does. Comparing the data rate and price of voice traffic is probably more instructive (although the two types of messages are admittedly not transmitted in the same manner across the network). Taking AT&T’s overage charge of $0.45 cents/minute and 13kbps as a plausible bitrate for a GSM call, my calculator says that SMS data is a mere 316% more expensive than voice traffic.

I concur, though, with this sentence in the TechDirt article which is why this laughingly expensive message transport won’t continue for long:

Fortunately for the rest of us, this state of affairs doesn’t seem likely to last much longer. Although there’s little reason to have faith in the mobile market’s ability to bend the carriers to consumers’ will, new technologies are going to inevitably dry up the SMS bonanza. We’re on the verge of the iPhone SDK’s release, and Google’s Android seems likely to find its way into many cheaper handsets.

I’ve witnessed first-hand the power of using a mobile transport for some things like Internet access at 80mph and instant messaging and even video chat at 75mph so there’s no question that an open mobile market — with the ability to use alternative messaging transporting like iChat for the iPhone — will drive the true cost of mobile data transport to a level that makes sense…and we’ll no longer get ripped off for SMS!

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About Steve Borsch

Strategist. Learner. Idea Guy. Salesman. Connector of Dots. Friend. Husband & Dad. CEO. Janitor. More here.

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