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The Rising Cost of Texting

Discussion in 'Wireless News' started by bobolito, Jul 1, 2008.

  1. bobolito

    bobolito Diamond Senior Member
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    The rising cost of texting

    By Marguerite Reardon, CNET 1 hour, 10 minutes ago

    If you thought gas prices were rising too quickly, check out what's been happening to text messaging.

    Since 2005, rates to send and receive text messages on all four major carrier networks have doubled from 10 cents to 20 cents per message. This percentage of increase is on par with similar price hikes at the gas pump as crude oil prices skyrocket. In 2005, Americans paid on average about $2.27 per gallon for gas compared with more than $4 a gallon today.

    Last October, Sprint Nextel was the first to introduce the new price of 20 cents per text message. AT&T and Verizon Wireless soon followed with their price hikes going into effect this spring. And this week Engadget reported that T-Mobile USA will match the other big three wireless operators in jacking up SMS texting rates to 20 cents per message. The price increase goes into effect August 29.

    On Tuesday, AT&T announced that texting will cost new iPhone users more than it had previously. The old iPhone plan included 200 text messages in the $59.99 voice and data plan. But plans for the new iPhone 3G that hits store shelves next week will cost $5 extra for 200 text messages, bringing the total price of a comparable voice and data plan on the new iPhone 3G to $74.99 a month. (This is with the $69.99 "Nation 450" bundle plus $5 for the 200 text messages.)

    The new wave of price hikes comes just one year after all the major carriers raised individual text messaging rates from 10 cents a message to 15 cents per message.

    So what's with the 100 percent price hike in two years? Well, there's nothing that has changed in terms of the cost associated with delivering this service. In fact, text messages cost carriers very little to transmit. And when compared with what carriers charge for transmitting other data services, such as music downloads or surfing the Web, the text messaging rates seem exurbanite.

    Carriers limit the number of characters that can be transmitted in a text message to 160 characters. Each character is about 7 bits, which works out to a maximum of about 140 bytes of data per text message. This is peanuts compared with the size of sending or receiving an e-mail or downloading an MP3 song over a cellular network.

    One blogger has done the math. If the same pricing was applied on a per-byte basis to downloading one 4MB song it would cost the user almost $6,000 to download a single song via SMS texting.

    One can easily assume that the mark-up on a text message is several thousands times what it actually costs carriers to transmit this little bit of data, considering that mobile operators are only charging $30 to $40 a month extra for mobile data plans that offer 5MB worth of data per month.

    The reason that carriers are charging so much for text messages is because they can. Even at 15 cents and 20 cents a pop, people are willing to pay for it. The carriers are also trying to get consumers to sign up for text messaging packages and unlimited plans that vary in price from $5 a month extra for 200 messages to $20 a month extra for unlimited texting on AT&T's network, for example.

    The massive price markup on texting and the growing popularity of texting have resulted in huge profits for mobile operators. Verizon reported that for the first quarter of 2008, its wireless customers spent $11.94 a month on data services, an increase of about 33 percent from a year earlier. The carrier didn't break out what percentage was spent on text messaging versus other services, but there's a good guess that a lot of the additional revenue from data came from texting. In total, mobile data accounted for about 20 percent of all wireless sales for Verizon's first quarter.

    Unfortunately, it doesn't look like consumers have much legal recourse for getting carriers to adjust their pricing to a more reasonable rate. There's nothing illegal about charging as much as the market will bear for any service.

    But that doesn't mean that consumers like it. What do you think about the high-cost of texting? Are you feeling the pinch in your wallet yet? I'd love to hear your thoughts in the "Talk Back" section below.

    The rising cost of texting - Yahoo! News
     
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  2. larry

    larry Sprint loyalist and former mod
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    Good thing I still have my grandfathered free unlimited text messaging!
     
  3. KyleAndMelissa22

    KyleAndMelissa22 Woot Woot, Splat !!!
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    Wow $6,000 per song. That means my entire MP3 collection is worth over $15,000,000! :D

    I don't even use texting, because IMO, its a waste of time & money.
    I'd rather talk 10,000 minutes per month like I already do. :)
     
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  4. SmArTeStChIlD421

    SmArTeStChIlD421 Silver Senior Member
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    see im the exact opposite of you.....i love beig able to have multiple conversations at a time......but i still manage to talk 1000 minutes next to my 6000 texts
     
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  5. Nextel32708

    Nextel32708 Junior Member
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    I love my $9.99 Unlimited Family Texting Package from T-Mobile (covers up to 5 lines)!
     
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  6. SmArTeStChIlD421

    SmArTeStChIlD421 Silver Senior Member
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    $9.99 family texting???
     
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  7. KyleAndMelissa22

    KyleAndMelissa22 Woot Woot, Splat !!!
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    It takes me over 200 seconds to type 160 characters, what a waste of time texting is for me, lol.

    Anyway, I think coin-operated pay phones are a way better deal than pay-per use texting.

    Only 25 cents for a whole minute! :D Versus 20 cents for the equivilent of 10 seconds (which is 160 characters).
     
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  8. budney

    budney Resident Headbanger
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    And I thought I was doing good with my $20 unlimited family texting, $9.99 is awesome!

    These higher texting rates got the best of my mom's boyfriend. He finally looked at his newest bill as it was really high, he had no texting plan when he thought he did. :D
     
  9. vcmike

    vcmike New Member

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    I guess if I used text messaging the increase would bother me. On the other hand I do drive, 17.35 gallons of regular set me back $67.13. I paid the bargain basement price of $3.87 a gallon. What a deal!:cool:
     
  10. bobolito

    bobolito Diamond Senior Member
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    It really depends on how you use text messaging. If you know how to use it, it can be quicker than placing a phone call. Suppose I arrive at someone's home to pick them up and I just want to notify them I'm waiting in the car. I just pick up the phone, select their name from the phonebook as if I was place a phonecall, select Send Message, type "I'm here" and press Send. All that takes about 10 seconds for me to do. If I was to place a phone call, just dialing and waiting for the network to connect and then for them to answer the phone takes longer than 10 seconds.
     
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  11. RadioRaiders

    RadioRaiders RF Black-Belt
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    The rising price of text messages is a simple supply-and-demand issue. At the rate people have been SMS-ing the last few years, the limited supply of SMS's will soon be depleated. Some say we have allready used up half of the worlds supply of SMS, and that we have to look into alternative ways of communication, like MMS or e-mails. In the short term, companies like Nortel and Ericsson have comitted to increasing the output of SMS, but it will not really reduce the current costs and is not a long term solution. We must explore alternative means of communication for future generations to survive.
     
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  12. bobolito

    bobolito Diamond Senior Member
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    LMAOL! ... sounds like a National Geographic documentary on oil supply.
     
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  13. KyleAndMelissa22

    KyleAndMelissa22 Woot Woot, Splat !!!
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    Sounds like something I'd say! LOL :lmao:

    I've already found an alternative, talking on the phone so much :)
     
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  14. tmobileman

    tmobileman Iphone Hater
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    Raising SMS rates is just a way to generate revenue, it either forces you to pay outrageous overage or to accept the fact that you need to add a monthly recurring charge to your acct for a feature. Either way the company wins, but since I am with the company I am cool with this. Besides as an employee my plan cost me 9.99 and I get free data and unlimited messaging by the way the 9.99 fam messaging rate mentioned earlier for the tmobile customer that is a grandfathered feature, current rate is 19.95 for family plan customers, still a great deal.
     
  15. viewfly

    viewfly Mobile RF Advisor
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    Ok, call me dumb, but I'm not getting the point here. Sure enough the per unit price of a text SMS is 20Cents per message, if you have no SMS plan.

    But the price per message in a Text Plan has dropped significantly over the years. ATT plans are:

    200 messages for $5.... 2.5 cents per message
    1500 messages for $15..... 1 cent per message
    Unlimited for $20... cheaper than dirt per message

    And the unlimited family SMS plan $30 for a family of 4 (for example).... $7.5 per person and again cheaper than dirt. But say daughter Sally uses 1500, then that is equivalent to 1/2 cent per message.

    Years ago, Text plans were much more per message than now. In fact I think an unlimited text plan was not even available. I would have to look it up from an old post of mine, but a similar calculation today would say if you send/receive more than 20 messages a month, get the $5 plan. I think years ago, the break even point was about the same. It's a pretty low threshold.

    But here is an idea...Rollover for SMS's !!
     
  16. Jay2TheRescue

    Jay2TheRescue Resident Spamslayer
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    Just do what I do... Why pay for text when I have unlimited email/internet and M2M calling on the phone? Pretty much I just call someone. If I MUST send some type written message I will send an email from the phone. All of my friends know to either call or email me, and only text when there is no other option. I usually spend under $1/mo for texting on all of my lines.

    -Jay
     
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  17. walkguru

    walkguru Wireless Guru
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    Wirelessly posted (Walkguru's: Opera/9.50 (J2ME/MIDP; Opera Mini/4.1.11328/534; U; en))

    thats why i got sero.
     
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  18. bobolito

    bobolito Diamond Senior Member
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    I guess you never noticed the $2.99/month unlimited text messaging plan that some carriers had 10 years ago. Comcast Metrophone (Philadelphia and NJ) offered this. You might also remember a plan Cingular had called "Media Works" that gave you unlimited data and 1500 SMS for $19.99. That was about 5 years ago. Now for the same price you only get 200 messages with the excuse that it also includes MMS. Also, you have to remember how AT&T Wireless had FREE unlimited incoming text messaging whether you had a messaging package or not. And also, Verizon only charged 2 cents for incoming SMS and 10 cents for outgoing SMS just a few years ago. Now it is 20 cents either in or out. T-Mobile just a few years ago had 500 messages for just $2.99. Today, T-Mobile charges $4.99 for 400 messages. Sprint, had unlimited messages for like $10. Now it's $20. Memory fades quickly, huh?

    Either way, you get much less now than before. That's just indisputable.
     
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    #18 bobolito, Jul 2, 2008
    Last edited: Jul 2, 2008
  19. Blue4Life

    Blue4Life Senior Member
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    Wirelessly posted (Mozilla/5.0 (SymbianOS/9.1; U; en-us) AppleWebKit/413 (KHTML, like Gecko) Safari/413 es70)

    I still have my old AT&T Wireless plan, which includes unlimited free incoming text messages. Since I still have an unlimited data plan, I send e-mail to the SMS e-mail address. It works for me. I find that receiving text messages is much less disruptive than phone calls if I'm at work, especially during meetings. :)
     
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  20. QLR

    QLR RIP Note!
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    I send email to folks on AT&T and Verizon, since I know their email addresses. I mostly text folks on MetroPCS directly since I don't know their address, so I have to have a small messaging plan for them. To keep costs down, I have data and messaging blocked on my other lines. I remember when Verizon had different rates for SMS: 0.10 to send and 0.02 to receive. The only thing that didn't change was the pay per use MMS messaging... I think it was a quarter back then also. At least mms messaging is included in the message plans!
     
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  21. Blue4Life

    Blue4Life Senior Member
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    Have you tried 10digitmobilenumber@mymetropcs.com or 10digitmobilenumber@metropcs.sms.us ?
     
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  22. QLR

    QLR RIP Note!
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  23. bobolito

    bobolito Diamond Senior Member
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    Yeah nowadays MMS is included in all packages. There used to be a pricing differentiation between SMS and MMS. I remember MMS used to be something ridiculous like 25 cents a pop while SMS was either 5 or 10 cents. So basically carriers have tricked us to think that MMS has become cheaper by pricing them the same as SMS, but what they've really done is just found a way to raise SMS prices to be at the same level with MMS from 5 years ago. So essentially, we're now paying for SMS the same we used to pay for MMS when it came out. Amazing! :rolleyes:
     
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  24. hme83

    hme83 Bronze Senior Member
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    Prepaid "Pay As You Go" SMS packages at at&t have rollover. :) (as long as you renew the package prior to it's expiration date)

    Of course the draw back is the lack of roaming partner coverage and incessant balance notification messages - even for no balance change transactions . :(
     
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  25. TheNasaWildman

    TheNasaWildman New Member

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    Give texting more time. As with all things someone will break, but the question is Who ? Will it be Sprint, Alltel, T-Mobile, AT&T, Southern Linc, Us Cellular, Cellular South, Uniell, or Verizon ? How about the two Sattelite phone companies currently in the USA, like Globalstar & Irridium ? Who Know's but in time we will all find out...... If any....:confused:
     
  26. viewfly

    viewfly Mobile RF Advisor
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    True, all the carriers have had different SMS/MMS plans over the years. But I and we should compare apples to apples. I can only judge Cingular and now at&t.

    Cingular never had a $2.99 unlimited plan. I think it was 100 or maybe 200 messages. The old ATT had free incoming SMS, but hey, they went broke, so Cingular bought them!! But we are still paying for those old blue ATT plans.

    In 2005, Cingular's best offer was 2500 SMS for $19.95. Just a wee bit better than the 1500 for $15.00 today ( $0.008 vs $0.01 per message). Back then the WA forums talked about how Cingular's policy was such that they would never offer unlimited SMS.

    I did have a Cingular plan for a 1000 SMS and unlimited MMS. Great deal, but back then people had problems sending MMS to other carriers.

    Which, BTW, is a good point. Even in today's WA recent posts, users are STILL complaining that they are having problems sending SMS between some carriers. Let alone to an overseas carrier. Also the phone number to send an SMS say to Europe is huge to type in.

    So I see just using email addresses for texting and photos in the future. A lot more simple, and it would solve the problems of SMS not getting through between different carriers. A lot easier to remember an email address than a phone number, esp. international. Plus one is not limited to 160 characters or small sized photos, lower than what today's phones can do.

    So today getting an unlimited data plan for $15, and using email instead of SMS probably is the wave of the future. But the would need to give everybody push mail, like the BB's
     
  27. bobolito

    bobolito Diamond Senior Member
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    Comcast had a $2.99 unlimited SMS plan. This was later on bought by SBC to form Cingular in 2000. So a Cingular predecessor had unlimited SMS for $2.99, and early Cingular had it but it was in this area only because they inherited it from Comcast. Remember that early Cingular was a "melting pot" of carriers and often times they had different prices and offers in different markets.

    But the bottomline here is that all across the board, messaging prices have gone up, regardless how we look at it.
     
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  28. Blue4Life

    Blue4Life Senior Member
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    AT&T Wireless didn't go broke. While the botched billing system upgrade may have hurt them, they didn't necessarily have to sell. If they chose not to sell, it definitely would have been an uphill battle to recover from it. In the end, they chose the easy way out (unlike Sprint) and ended up selling to Cingular at a premium.
     
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  29. Gamer03

    Gamer03 Technology Aficionado
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    I will continue to use SMS. For me, it is faster (a PDA phone helps :D) than a phone call, saves on your minutes (especially if your call isn't M2M or during the N&W time), and in certain instances it is the only means of communication [especially if you are in a weak coverage area or in an area where voice doesn't work (Hurricane Wilma that hit my area a few years ago comes to mind since voice didn't work and SMS was the only thing working on a cell phone)].
     
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  30. bobolito

    bobolito Diamond Senior Member
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    I use text messaging in other situations where it is the most proper way to communicate, such as in places where it is too loud or too quiet to use a cell phone, like in venues, libraries, restaurants, meetings, etc. I also use it to save information that is hard to remember and I don't have pencil and paper around, like product models and prices or account numbers and even mailing addresses. It is quite handy for those situations when you want to retrieve that information and you don't have to memorize anything.
     
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