If you've been paying attention to mobile carriers' SMS pricing lately (and something tells us you haven't) you'd be surprised to discover a fairly disturbing trend amongst providers: price hikes. Over the past year or so, nearly every major carrier in the US has raised their per-price cost of SMS messages, with
Verizon and
Sprint jacking up the fee from $0.15 to $0.20 a message, and AT&T and T-Mobile adding another nickel to their $0.10 charge. Of course, this trend of rising prices accompanies a major spike in the use of text messages amongst customers, with some surveys marking a 130-percent jump over SMS use since June 2006 -- and telcos are taking it to the bank. What's most insidious about the inflated costs is the fact that SMS data is particularly low-bandwidth, and analysts say that the price increases aren't related to higher operating costs -- these companies are simply gouging customers for a service which they have embraced. Companies say the hikes are meant to encourage customers to go for more expensive "bundles," though we're confident they won't mention it when your Mom uses more messages than her plan allows and unwittingly pays a few extra bucks on her bill -- that stuff adds up, you know?
posted January 23rd 2008 8:35AM
$7/m for unlimited mobilet net?
*swears profusely*
I pay NZ$15/m for 3mb. Yup, megabytes. It hurts, I tell ya.
I think in the UK, we have more of a 'txting' culture than in the US. Most people have bundles with their tariffs (I have unlimited txts with Orange) although this was not always the way - hopefully for you guys, the more people that txt, the more the networks will reduce individual costs and create bundles. Then again...
More of a texting culture than the US? Are you being serious? I don't know, maybe it is just the people I know, but my friends and I regularly send between 20,000 and 30,000 texts a month. Not only that, but everywhere you go, you see people texting.
You don't send 30,000 texts per month. That's a thousand text messages a day. I'd venture to bet that even you are not that prolific.
Apparently the UK and Ireland are the largest texters in the world, I know for a fact that there the highes mobile:person ration is in Ireland, with 102 phones to every 100 people at the last count.
@ Matt
Just because you don't send 1000 text messages a day, doesn't mean other people can't. Being in class tends to get boring after a while. Especially on days when you are in class from 8 to 5.
It's impossible to regularly send 1,000 text messages a day. That's one message every 1m 26s. All day. Every day. 24/7. You tell me 50 or even 100 a day and I might believe it. I don't care if it's "possible" to do 1,000 a day, no one does it habitually.
What is truly amazing is that US cellphone companies are billing both ends for the service: you pay 20 cents to send a SMS, and the person you're sending to pays 20 cents to receive it. 40 cents per message.
European cellphone companies, who are no philantropists themselves, have balked at the idea, and are only billing the sender (15 euro cents per message, which is still a rip-off). I had never even heard of the idea of billing both ends until I crossed the Atlantic. To our friends who live in the Old Continent: the Americans also pay to *receive* calls on their cellphone. Yep. I kid you not. The number of minutes in you monthly plan include both incoming and outgoing minutes. Again, never heard of in Europe.
This is exactly the way it used to be at AT&T (pre-cingular-acquisition) and then cingular. When I moved to a multi-line plan on cingular, I found out (by myself, mind you) that they now charge both sending and receiving. Absolutely ludicrous considering (as someone else mentioned) we cannot refuse the reception. It isn't going to break the bank, but I hate the concept behind it.
WT-Freaking-F ?!
you have to pay to receive texts and pay to receive phone calls? charging at both ends?
Now I understand where ISPs get the idea for a tiered (i.e. double charging) internet service. They see the sweet deal mobile providers are getting and want a piece of that action.
How is it that this became a normal and accepted charging model?
In some countries when you run out of minutes people can still call you.
"Companies say the hikes are meant to encourage customers to go for more expensive 'bundles'"
Does that mean that they won't then hike the price of these value "bundles"?
I have a statement in return for these phone companies: "Don't insult my intelligence."
30000 text a month? Do you realize how many that is? If you were awake 24hrs a day you would be texting 42 mins for every hour. By no means do I mean to stick up for the phone companies but they are a business not a charity. I don't think their intention is to price gouge, they want people to pick up text bundles. Seriously, even if it were only 5 cents a message and you send 30000 like the users on this forum, that would be $1500 in pay-per-use! Get a text plan. Also, I'm surprised I keep hearing people bring up Europe and how incoming calls are free and they are amazing for it. Ask them how much they pay to make calls. Ask them if they can make unlimited calls and txt for $55 like Lizeth, on this board posted. The bottom line is, the phone companies wouldn't be able to charge any of these prices if you the user didn't use these features and didn't pay it. Some of you guys are starting to sound like my Grandpa, "I remember the days when a hamburger and a Coke were a quarter."
I got tired of paying extra for everything. I used to have a $60/m plan, but ended up paying about $150/m. Finally I switched to a local unlimited company. Now I pay $55/mo and get unlimited minutes, internet, and sms.
Yep... take at&t for example...
$.01 (1 cent) for each kilobyte of data transferred and $.15(15 cents) for 160 bytes (one text message).
so mathematicians, what's the mark up???
I think the markup is approximately $.15 per message. I imagine a single message costs them next to nothing.
I know it's a rhetorical question, but the number you end up with is shocking. That's about 100 times the price of the data.
You are comparing apples to oranges. Data and SMS don't use the same system.
That's why I was more than happy to sign on with the Sprint SERO plan. 1250 minutes, unlimited data, unlimited messaging services for $50 a month. Not too shabby on my part I think.
Granted, I picked up a RAZR, which is not the best phone in the world. But I hope to be upgrading to an HTC Touch before long.
Though I'm still waiting diligently for the Android OS to really roll out and pick up the best plan for whatever phones are utilizing that.
This.
SERO is the best deal around. If you don't need 1250 minutes you can get 500 mins with all the same extras for $30. Unless Sprint just doesn't exist in your area I don't understand why someone would go with anyone else.
How does one get this SERO you speak of?
I love SERO. I tell everybody about my plan:
500 minutes (I typically only go to 300)
Unlimited texting, roaming, internet
=$30 -10% loyalty -$10 in "misc. credits ;) =$20 a month
I tell all my friends/coworkers about it, but when their contracts expire, they always renew their contracts. Well, I tried to help, but some people just like getting raped in the butt.
@ OneLove
Find the Sprint SERO site, quick google search because I don't remember it.
It asks for a Sprint Employee email. So just type in savings@sprint.com and gain your newfound happiness. I hardly ever use my 1250 minutes, but it's nice to know that I have them. Best deal around, I can't hardly understand why people pay outrageous amounts for similar with other services.
Last time I checked Cingular would not allow one to have both an unlimited text plan and an unlimited data plan. I'm not sure about the new AT&T.
Something else I noticed is that the contract terms on most cellphone companies no longer have an early termination fee that diminishes with time. It just seems to be a flat fee of $175 to $200.
At one point in time if you had your own phone equipment then you could get it activated without a contract. Now it also seems that even with your own equipment a 2 year contract is required. A couple of days ago I tried to pay the full MSRP for a phone to see if I could get it without a contract (something else one could commonly do in the past) but it appears that being able to do this is also less common.
Are you being serious here? You do realize the opposite of everything you said exists, right?
Unlimited Text and Web- $35 (crazy, I know)
http://www.wireless.att.com/cell-phone-service/services/serviceDetails.jsp?LOSGId=3977510881&skuId=sku1160058&catId=
Prorated ETF
http://www.engadgetmobile.com/2007/10/16/atandt-moves-to-prorated-etfs-too/
Contractless Activation
http://www.engadget.com/2008/01/22/atandt-says-sim-only-service-available-contract-free-2-year-plan/
Wow! This is new [to me]. When I last spoke with a sells rep asking for unlimited text and data service I was informed I could have one or the other but not both.
We sure do! So in theory a phone company gets to charge twice for a single message sent from some one on their network to someone on their network.
Why is this suddenly an issue now? I have known for YEARS how much of a ripoff SMS messages are! People should have been up in arms the instant they climbed above 5 cents! As the author so accurately stated, an SMS is has extremely low operating costs to the carrier.
Its always funny to meet people who forget that:
a, the World is not fair
aa, not even outside the US
b, cell phone provider companies want to make $!!
c, you can always choose not to use them(or less)!!
d, stop whining about text prices when at the other side of the world people have similar costs but with half, third or a quarter of your salary
e, I know I was unfair and its generalizing but hey...read point a...
So glad i'm with Helio! But in all honesty, this really stinks especially for my verizon-bound family. Guess I'll be restricting my texting to them to a minimum!
Too bad they're going under eh?
these are the times i love living here in the Philippines.. a third world country that loves technology... even if we have one of the most expensive internet rates and really bad internet service for home users, our SMS- txt charges on average is only 1 philippine peso, last i checked it was 41 pesos to $1, and our telecos have unlimited services for txts within the network going for less than a US$1 per day... not sure about the numbers but i think there are about 1 billion txt sent a day here in the philippines... not bad for a 3rdworld country hehe
and we do have data services also video calls etc. for my network i think its .15 philippine cents per kilobyte hehehe
I have long been saying that sms was the biggest rip off in wireless. It costs them practicly nothing to service. Think of it this way. Cell phones are already running through digital communication, which means they are converting your voice into 1s and 0s and sending that data accross their towers. So, text messages and voice are transmited in the same way. I would assume they are encoding at something like 32 kilibites per second (just a guess, don't know for sure). A text message is 160 characters or less, and each character is only one bite. I can't see it being more than a coupe of kilibites.
So basically, a text message uses less bandwith than one second of voice communication!!! That's the gist and it's a scam!
Is there a single wireless company out there that isn't a total PITA to deal with? I've just left school to enter the workforce, so I'm going to be off the family plan very soon. What companies should I look at?
The family plan is with Verizon. I can only say two positive things about Verizon.
1)In-network calls are free -- anytime, any person. Particularly nice because my girlfriend is on Verizon, too. But I imagine other carriers have started this practice, too, right?
2) Verizon had good coverage at school. But now, where I live and work (Maryland), they're dropping about 10% of my calls, particularly in my apartment.
So, what carriers have good, affordable plans, plus good (customer) service? Or do any such carriers exist at all?
I live outside Baltimore and I know exactly what you mean. Service around my house is horrible, everywhere else is fine.
Choosing a provider is just like choosing a phone. It's all about compromise. Big Red's coverage is the best in the area but their customer service is one of the worst. On top of that, they twist your arm and limit the hell out of your phone's functionality.
I'd say go with T-Mo. I like the GSM standard a lot more than CDMA. I hear their coverage is adequate but their customer service is top notch and trying to get some function out of your phone isn't a hassle.
I live outside Baltimore and I know exactly what you mean. Service around my house is horrible, everywhere else is fine.
Choosing a provider is just like choosing a phone. It's all about compromise. Big Red's coverage is the best in the area but their customer service is one of the worst. On top of that, they twist your arm and limit the hell out of your phone's functionality.
I'd say go with T-Mo. I like the GSM standard a lot more than CDMA. I hear their coverage is adequate but their customer service is top notch and trying to get some function out of your phone isn't a hassle.
It's sad, I remember when they were free!
As a Verizon customer, I find this pretty ridiculous. I believe it was last year when they raised the price from $.10 to $.15, and now another 5 cents? I personally have a text messaging plan, but most people I know do not. As far as I know, there is no way to reject a txt with Verizon, which means you DO have to pay for every incoming text message that you receive. And unlike all of you with ATT, Cingular, or Sprint, who are able to get unlimited internet/text plans for $15/mo, or whatever it is, with Verizon it costs us $30 or $40/mo on top of our regular plan costs to get unlimited data. The prices are an outrage.
I guess I'll put my 2 cents in.
For years we have been willing drones for the phone companies here in the US, taking their abuse and asking for more as if we enjoyed it. It seems criminal to me to charge for both ends of the message (sending AND receiving.
I think our government should step in and pass legislation that restricts the carriers to only charging for sending messages. You send me junk, great, it doesn't cost me.
So...
What we can do? It's one thing to complain and whine, it's another to take action and create change. I'd prefer to do the latter.
I can't help but feel that the FCC would be a party to complain to. But in doing that one could be exchanging the devil for a witch.
I've personally been able to avoid the cost of sending text messages by sending a message to the phones e-mail address (ex: 1111111111@txt.att.net) and since my phone is syncing with exchange I get instant notification of the e-mail reply (I've got an unlimited data plan. AT&T doesn't allow you to have both unlimited data and text).
Here is India... Receiving calls and SMS has always been free.
This is their Cash Cow. They charge it because they CAN. Dammit. Would you people please stop paying these insane fees!
I'm irate.
i still have 600 txt/day free... via my skypephone :P i have just to topup 10€/month that add up to my pay-as-you-go credit.
So, that sounds cheap, here in the UK we have to pay 10p a text which is about 20 cents and some even charge 12p! That sounds cheap.
ah, it's only to other skypephones... if i have to txt to non-skype friends, i have one other mobile: 9c/txt o 1c/txt depending on receiver's carrier..
ah, it's only to other skypephones... if i have to txt to non-skype friends, i have one other mobile: 9c/txt o 1c/txt depending on receiver's carrier..
If you are too cheap to pay for unlimited text messaging, I think you leave yourself open to getting skivved for it.
I don't think it's a matter of being cheap. Unlimited text plans are not always available depending on other services one subscribes to, especially if one has unlimited data/internet.
I use Sprint, and I pay $30 a month for unlimited data/internet that includes unlimited text messaging. It seems to me that it is easier and cheaper to pay for unlimited in the long run on any carrier. If you choose not to, I just don't have all that much sympathy. I don't know, it just seems to me that the people who complain most about their cellphone providers are the ones trying to get the cheapest service possible.