UNINNOVATE / Engineering At Its Finest

In March, AT&T is raising their rates for sending and receiving standard text messages to an astronomical 20 cents per message. MMS (Picture messages) are going to be more expensive at 30 cents per message.

AT&T has started informing customers that unless they’re subscribed to a messaging plan, they’ll be paying 5 cents more for both text messages and picture / video messages — now up to 20 and 30 cents per, respectively. The change takes effect March 30, so we’d recommend you either tell all your peeps to cut it out with the messaging or sign up with a package by then.

AT&T boosting pay-per-use text and MMS rates — again - Engadget Mobile

This is even more insulting because it costs AT&T nearly nothing to send these messages. Text messages are limited to 140 bytes in size - a minuscule amount of data. So if you do the math, that works about to about $1,500 a megabyte. A blogger named gthing carried out this math to the extreme and figured out how this compares to sending data via your normal internet connection:

When calculating SMS charges, most people don’t take into consideration that the message is really being paid for twice! If I send a message to another AT&T user, I am paying to send it AND they’re paying to receive it! This should probably be illegal, but that’s for another discussion.

So how much does an SMS message actually cost? Not 20 cents - but 40 cents! This doubles all of my numbers above. Furthermore, my above figures estimate that people actually use all 160 characters available to them. Say people on average actually only used half of that (which is still being generous) - then their price of data has again doubled from the numbers I gave above!

Making adjustments for both of the above statements, we realize that our above number isn’t even close to correct! Corrected, the comparison looks more like this:

COSTS OF TRANSFERING 2,560 MP3s:

via my ISP: $1
via SMS: $61,356,851.20

Phew! THAT is premium data! It’s no wonder that SMS texting alone is a 100 Billion dollar a year industry!

The True Cost of SMS Messages » a gthing science project

So while it’s not likely that you are going to start sending files over text message any time soon, this clearly illustrates the gouging that the phone companies are doing. By sticking to closed systems like SMS instead of adopting standard text messaging platforms, companies like AT&T are able to wring huge amounts of money out of their customers.

This has strong echos of the early days of the internet. The large existing online services like CompuServe charged several dollars per hour and were reluctant to provide their users unrestricted access to the internet. Well, we all know how well that worked out for them. Does anyone even remember CompuServe? This is the wrong time for cell phone companies to be afraid of new business models.

Tags: at&ttext messaging sms cost mobile spectrum auction compuserve