Another Way Carriers Screw You: Texting

I have an old grandfathered plan from Sprint. For $10 per month I get unlimited text, pictures and internet browsing.

 

Here is the direct link to the NY Times article:
http://www.nytimes.com/2008/12/28/business/28digi.html?partner=permalink&exprod=permalink


The writer has some good info. about the cost to provide texting, but why does something have to be priced according to the cost to supply it.

The usefulness and fun that people get from texting leads them to pay a certain price for it. If the carriers can provide something in high demand, shouldn't they be able to charge whatever the free market will bear?

It is true that consumers should put some thought into what they are paying for vs. what they are actually using.

 

http://www.foxnews.com/video2/video...//www.foxnews.com/story/0,2933,474044,00.html

Click the second story on Texting. Video.

 

To paraphrase from the FOX Newscast: "It costs nothing to transmit a text message, since it's going over the Control Channel which is broadcast anyway".

Funny how nobody mentioned the costs the carrier needs to build a tower (and network!) and keep it running. The Control Channel isn't just magically there...:loony:

People just love to complain.

 

Sounds like you're predicting a pretty busy four years. No possibility of eight?

 

Let's keep this thread on topic please.

Thank you
Palm850/v0100 Mozilla/4.0 (compatible; MSIE 6.0; Windows CE; IEMobile 7.11)

 

Definitely...this is a good topic. Thanks for posting it. :thumb:
The forum is also here to help people make wise choices when they pick a carrier and a plan.
Probably a lot of people who have unlimited texting could dump it and save some dollars.

 

They would build it regardless even if text did not exist. Right?

By the way; Happy New Year........

 

Tmobile did at one time offer unlimited msging sms/mms/im for 9.99 for family plan customers, this is still an offer I throw out there for long term family plan customers that have the 19.95 FT msg bundle, one charge of 9.99 covers all lines in family plan up to 5 so it like 2 bucks a line for unlimited messaging if you do have the max in your family plan. I think that's pretty fair.

 

Yes, every TRU has 1 control channel and 7 voice channels. Should the use of the control channel be free? I don't think what channel it goes on is really the issue. It's a service. People are trying to break prices down by bandwidth or bits and it really doesn't work like that. If you did it that way HSPA prices would be insane. ...and don't forget texts go thru the rest of the network as well, so you're not just using the Control Channel on the radio, but the backhaul and switching/gateway resources as well ...should the use of them also be free? One dimensional reports like the FOX News thing don't really show the whole picture.

The suit-wearing bean-counters decide how much they need to make to keep the network running and then decide the price of services. If people complain texting is too expensive, I suppose they'll lower the price, but then raise the price on something else. It's a business. They need to keep the network running and prepare for 4G. And telcoms aren't exactly swimming in money right now...

CS means a dedicated channel/bandwith, even if you aren't using it. PS is a "best effort" service that uses whatever resources are available at the moment.

 

I feel far less gouged by my messaging/data plans than I do by the fact I have to combine it with a $40 voice plan to get full network access (no roaming on at&t PayGo; limited roaming on PYP).

Regardless of whether the carrier is making a fortune off me or not, I find a great deal of value in having "anywhere/everywhere" access to a cellular network (rather than needing to find a wifi hotspot), and I'm apparently perfectly willing to pay for that.

But it *is* frustrating to spend so much in terms of the voice plan which goes virtually unused. I'd like to see a messaging/data plan arrangement that is oriented toward minimal voice users - whether voice minutes are on a "pay per use" basis or small monthly allotment.

 

Whoop! Whoop!

I got that loyalty perk!! (and then some... free MyFaves!) - $1.99/line for unlimited SMS/MMS (can't beat that!!)

 

While this sounds good in theory, I don't think it would be so good for the carriers. Let's assume the voice plan pricing is set to create revenue. By refunding for unused minutes, the revenue goes away in a many instances. The only way to make up for that is to charge more to those who are using minutes. Just because I didn't use the minutes doesn't mean the service should be available to me for free. The scenario you described is more like pre-paid--you use what you paid for and no more.

It's a little like saying I pay an insurance premium to drive my car, but if I don't file a claim each month I should get a refund of that month's worth of premium. If I go five years without a claim, should I get five years of insurance for free?

 

In the US the basic price model is the "all u can eat" package of something like $40/month and a bunch of minutes that most people never use (and don't forget the free subsidised phone every 2 years is mixed in the price too), and maybe $10 or $20 a month more for a bucket of SMS. In Europe it's the opposite, you pay a low subscription price, but don't get much for it other than maybe free/cheap calls within the same network (and the subsidised phone) and you pay more per minute on voice calls out of the network (maybe $0.30/min).

MVNO's cater more to the "picky" subscribers by offering specialized plans. I have most US MVNO's listed here: MVNOlist.com

 

Got it, thanks. :cool2: Sounds pretty reasonable.

 

There have been services sold over the control channel for years, from alarm monitoring, to very basic data services. For text messaging to work across the country modifications and equipment had to be put into every switch and tower location across the country. This in itself is very costly. The cost of a 500 minutes of voice calling is no where near $40, but the ability for you to make those calls from virtually anywhere you want is what you are paying for. Having the experience of setting up a CLEC company a few years back I can tell you, the telecommunications field is not a cheap one. Even things that the customer never sees on a bill are expensive Interconnect fees, cost associated with number portability, directory assistance databases... Do you know that everytime a phone carrier's switch dips into the Number Portability Databases, there is a charge to that carrier, or when your call starts on one network, and ends on another there is a interconnect charge to that carrier.

It cracks me up when people say the carriers are screwing you... on occasion that is true, but with most data services, the initial price offerings were set low to encourage uptake of the service. When I started in wireless in 1995 most of the plans we sold were 10-20 per month... check your carriers, all those plans are now extinct. They were there to encourage more people to jump into wireless... It's the same with data products.

 

I am definitely still the exception in my crowd, but I use less than 5 minutes of voice per month (mostly just checking voice mail from wrong number phone calls - lol). I use primarily data and some messaging.

I really have no need for rollover - since you can change your voice plan at any time on at&t, if I encounter a month where I need more minutes, I'll up my plan for the duration. I might get bit a little by the prorated charges, but personally I'd rather self-fund that risk than pay on a monthly basis for minutes I don't need currently (i.e. "minute insurance").

The carriers seem to have a postpaid monthly minimum revenue of at least $40 that they want to achieve - they could maintain this by implementing a much smaller voice plan (maybe 100 minutes for $25 w/o rollover) with the requirement that it can only be combined with either an unlimited messaging or data plan. If they'll sell "all voice" for $40, I'd like to see them sell a combo inc. other services for approximately the same amount.

I do agree that the mix of services being used by customers is changing - so it's only a matter of time until carriers adjust their service plan offerings/marketing strategies to incorporate this shift, at least imo/hope.

 

Joe (JFB) makes a very valid point when he asks: "why does something have to be priced according to the cost to supply it?"

The overhead of running a business is something any business encounters. Even if you are running a janitorial service. For example, the mark-up on toilet paper, soap and whatever else is supplied is not meant to cover just the item supplied but the cost of running a business as well. That anyone would complain about wireless companies charging for services that may not cost them much directly shows a lack of business understanding. Long before texting became mainstay, all the wireless companies saw this as a cash cow because they had already heavily discounted voice. If you want ___-for-tat, perhaps they should start charging what it really costs for voice; perhaps they should stop discounting phone equipment.

 

I'm all for the end of equipment subsidies, it falls right in line with the people that think ETF's are wrong, pay full retail for your phone, then we can talk about ETF's and the true cost of text messaging.

Take a look at phone pricing at Cricket where they don't do contracts $229 for a RAZR V3s... Carriers with contracts and ETF's... V3A's for .99 after rebate.

One thing I didn't see in that cost of text message was the cost of the landline connections from the tower to the switch, most wireless networks use landline networks to connect the towers to the switch (a few use microwave, but not many.)

 

That is one of my favorite parts of AT&T, Rollover minutes.

As for the topic at hand, I too am one of the many who hardly EVER talks on my phone. The only people I actually call are my grandparents, and parents, and that's only because they haven't ever taken the time to figure out how to text, if they ever do though, I'd say my talking days are over.

~*Ash*~

 

I guess that's the other side of the spectrum. Still, I had to kind of chuckle--Here I am absolutely blown away by my GPS that talks to me; a wonderful peice of software (Dragon Speak Naturally Speaking) that allows me speak my thoughts and see them converted to typed speech; and just the mere indulgent pleasure of audiobooks, thus freeing me from typing and reading, and then I read something like the post above where someone actually enjoys the potential of increasing carpal tunnel syndrome so that they can type of tini-winie keyboards. Baffles me, but hey, each to his (or her) own!

 

It will eventually come as long as the FCC does not regulate ETF's. As the cost of technology falls, and people feel like they are getting screwed over, they will be able to afford to purchase the phone outright and demand contract free. As long as there is competition, the market follows the demands as long as it is economically feasible.

Now, it is a different story if the FCC decides to regulate ETF's.

 

That's not entirely accurate old boy. There is no single European wireless market (yet) so each country has different standards and rules and thus it's difficult to generalise.

In the UK the biggest advantage customers get, in my opinion, are subsidised handsets. A standard contract is 18 months here and costs £30-£35/month. I'm not sure if that's expensive in American terms, but in the UK it is about average. For that one can expect between 500-800 minutes for use in calling any UK number (mobile and landline (including other networks)) and unlimited texts and a free handset worth up to £500. Incoming calls, texts and MMS are free of course.

Other countries will differ no doubt. For instance, I believe the system in Switzerland is a bit different to the British system.