That answer is exactly the same as most other markup questions:

People will pay a huge markup for anything convienent.

Though it may seem unfair, fair market value is what people are willing to pay for a service or product. I think people are willing to pay more because of the simplicity, and the cell phone companies are capitalizing.

Cuz like, most 14 year olds don't like, use data packages. Duh!

Barring that, it's just another way to get more money out of people.

"Because they can."

Let's be honest. The most frequent users of text messages tend to be the under 18 crowd, with no sense of responsibility and often no common sense. Why waste $0.10 for little more than a sentence when you can call them for less?

I like the British model, where texts are 3p each, and nearly every plan is Pay As You Go.

There has to be a market in there somewhere for phone services like the ones attached to that firefly phone to also include a text messaging packet for an extra $5 a month.

One work "Teenagers". Teenagers drive what is trendy in technology, and they have parents that will pay for it.

They charge on what you think the service is worth, not how much it costs them. Seen one of the energy drink 4-packs in a grocery story? $6 or so? Yeah. Costs little more to make than any other drink. You're paying extra because you WILL pay extra for a drink that'll give you energy.

I'm 40 and don't use text messages at all. Much easier to call the person or e-mail them.

If congress is worried about bank fees grossly exceeding what they actually cost the bank, why not go after text messages too? If a text message is really worth 0.2 cents, why do we get charged 10c?

Sprint just offered me unlimited for $8/mo. with my new plan- or 500 free a month.

I'm over 30- if I do 20 a month it's a lot.

For argument's sake, you could say that data bytes are purchased in bulk. When you use a data package, you are agreeing to "buy" more bytes -- by a few orders of magnitude -- than with the text-messaging plan. I realize it's an imperfect comparison, but it's one element to consider.

The post poses a good question, though. Is there any possible infrastructural reason a cellphone company could offer to justify the chasm between the two rates? Even my half-spurious "buying in bulk" notion wouldn't account for a 5,000% markup.

I'm guessing there's no tangible justification. I think Kornkob got it right when he said that we're paying for convenience.

I can't speak for Verizon and how their network utilizes SMS, but Cingular's network transmits SMS over the voice network, not the data network. So it's not exactly an Apples and Oranges comparison.

@ShortbusKid: I think you meant "it's not exactly an Apples and Apples comparison."

I agree with ShortbusKid. It's two entirely separate technologies, one involving interaction with other providers and companies, the other involving entirely in-house resources.

I'm not saying that text messages, data services, or voice plans are reasonably, rationally, or fairly priced, but this is a pretty stupid basis for complaint.

I agree that Verizon or other providers can charge what they want, however overpriced it is. My beef is that on my 800 peak minutes/month plan, my flat monthly fee is, say, $60.00. If I use only 400 minutes in a given month and send 1 text message, my bill is $60.10 (excluding taxes).

Wouldn't it be nice if I could trade a few of those unused voice minutes for other services (even if it was 10 voice minutes per text message, or whatever)?

This kind of extortionary business model is why the US is constantly 5 years behind the rest of the industrialized world (and some of the developing world) when it comes to mobile technology. I'd gotten into the habit of texting while in Asia, and my first bill after returning to the US of A was a huge shock.

Sooner or later someone will figure it out and start undercutting the competition, assuming there's any competition left and we're not all customers of AT&TVerizonBellSouthCingularCorp

I use text messages a lot. It's easier in noisy environments (bars,server rooms) and a million times easier to check than the voicemail. I never exceed 5 bucks a month worth even with the rate increases, so it wouldn't be thrifty to either get a data plan and use im or buy the 500 message/$5 plan. It's a scam, but overall cost-wise it is a better option for me and probably many other people.

Just to play Devil's Advocate, I believe that SMS goes over a special channel which adds to the cost. The internet is a "dumb" network which allows all kinds of data traffic. The phone system is "smart" which means special accommodations are needed for different kinds of services. If net neutrality is overturned, a lot of internet services will start looking like SMS.

Hang tight users of cell phones! The landscape is going to change drastically by 3/4Q of this year. Pronouncements by Sprint is that they will have a 4G data package for appropriate phone sets. The neat thing is the data transfer side of their offer will be flat rate at 112kbps. There is also a proposal before the FCC to break open the phone sets so third parties can offer sofware and services on the CPE.

Now lets say it all happens. Skype,Xten, Belkin develop software to run VoIP over the data channel @ 56kbps. I still have another 56kbps for data. The effective rates? .01-.02c/min assuming that you used the device only half the time of the allocated time allowed. That's vs the .03-.05 consumers get today.

If it happens the world of wireless is going to change drastically. For example if Nokia came out with a wireless version of the N770 the rush for phone upgrades die and I just software updates.

SMS is not a simple packet data transaction.

I don't think there is much reason to go into the technical differences, let's just say that I can receive an SMS from anyone at any time, but I could never host even the most simple web site from my phone. The technology just doesn't work that way.

One thing that they should do is make texting to people who are on the same carrier as you much cheaper.

It's higher than that, actually. Verizon increased their SMS rate from 10 cents to 15 as of March 1st.

While I have no doubt the cellular carriers want to charge as much as possible for each text message, there are technical differences that can account for some of the discrepancy. When your cell phone connects to the network, there are actually two (three for some data plans like EVDO) channels that it uses: the control channel and the voice (and data) channel. Your phone is always listening to the control channel, so that's where text messages are sent. Beause everyone else's phone is always listening to the control channel too (it's shared among phones connected to a particular tower) the bits on that channel are a scarce resource. The data channel is only in use when you are actively using it, so it's easier to share one data channel among many users.

As a side note, because text messages and voice don't use the same channel to communicate, it is sometimes possible to send a text message when it's impossible to get a voice call through. EVDO works the same way: it uses a data-only channel to talk (hence the "DO") and heavy call traffic won't disrupt it. I had a friend use voice-over-IP-over-EVDO to place calls during the katrina/rita hurricane season when nothing else could get through.

a million times easier to check than the voicemail.

Really? I call up Alltel's voicemail, they request my password and it plays my message(s). I press 5 or 6 buttons when I call it. How many buttons are pushed on during a text message?

In my experience, its the tool of college and highschool guys who don't have enough gumption to actually call girls. Instead they text them.

And they pay the premium price for such a service.

Did you guys know that if you receive text messages from anyone, then you are charged a fee for simply receiving one?

If you call your provider up, they will put a block on text messages, so you don't end up with a string of 25 cent charges. If you don't have a plan, its usually 25 cents with most carriers.

Woof.

It used to be that texting was the cheap way to communicate. You'd save money by texting if you don't need to call. It was also better than suffering intense ambient noise during a voice call. Furthermore it's good for passing number, phone numbers addresses etc. You don't have to rewind voicemail over and over to get the number written down, it's right there.

We'll see if the new prices outweigh these benefits.

If only things were this easy.

The network for transmitting SMS messages is a terribly complicated one where pretty much everything is based on old(er) packed switched connections. Each provider invests millions in sms service centers, which in essence are just massive computer servers from companies like Comverse.

Then you need a fairly complex system of billing integration with your existing systems.

Then they need to work on interconnectivity with other providers (remember just a few years ago you couldn't even send an SMS to someone on a different network). Of course, this interconnectivity gets more complicated when you also want to allow people to send messages abroad. You then get into clearinghosues for messaging and crossborder billing.

So, while I agree that the price for a message is still totally insane and out of sync with reality, the technology behind SMS messaging most certainly is not the same as data services for the operator.

But why stop complaining there? The cost of an incoming minute can be as high as 15 cents/min, what justifies THAT? What justifies the operator asking $35 just to let you become a customer ("activation" fee) when activiting your phone is totally automated for them. Mobile operators have to be the only service where you have to pay just to be allowed to pay more.

Lets face it, mobile operators invested millions/billions in their networks, and they'll do whatever they can to get a massive return on that investment.

too much teknikal stuff. my brain hurts now.

I can't believe nobody has asked if you mean 0.0000146484375 dollars, or 0.0000146484375 cents.

I use text, but I use Blackberry messenger built into the BB. It uses the data connection and is unlimited. Only downfall is that the other user musy have it also, but most of the people I text do.

By this argument, on most providers, everything is data anyways. According to that math, the data charges are nuts when you think about how many bits you can push across in voice (or even video calls) on a 3G network in 1 second.

There's actually nothing stopping you from using one of a number of 3rd party sms providers that have substantially lower rates (where you pay your provider's regular data rate for 200bytes or so, plus are billed a few cents from the third party), but it's inconvenient. There's also nothing stopping you from sending e-mails using your data package to one of the many providers' e-mail-to-sms gateways (mine is XXXXXXXXXX@fido.ca, for example and received messages are almost alays free).

What it comes down to is convenience and willingness to pay. The service is wirth whatever people are willing to pay for it, basic supply and demand.

Just my 2 cents...

@eastvillageidiot:
because it says $.000. obviously not a percent.

It's what the market will bear.

ExtraCheese,

You assume wrongly that any future development in wireless would utilize SMS. When you have essentially ISDN rates speeds over a wireless data packet network you abandon SMS and go with any of the internet IM protocols to do the equivalent of text messaging.

SMS messages are not IP based. Your cell phone data connection is. This is more obviously evident on higher end phones (like Blackberrys or Treos) where you have more configuration options.

You are comparing apples and oranges, so your analogy does not hold.

That said, I'm sure they are making insanely immense profits. But your math really doesn't hold up.

Handful of people here are on the right track: SMS != straight data. (!= does not equal). But it is very close. And also very slow. The infrastructure is hardly expensive. SMS preceeded many, many services that depend on faster data, which means it works over trash net. SO what is SMS?

short message service. similar to email, but uses more low level commands. AT commands. Super nerds know what those are.

A little like TTY, a little like push email, and alphanum pager...

Anyone hungry for deets just read: http://en.wikipedia.org/wiki/SMS

Try it: if you send a text to your email, it comes from 123-456-7890@cingular.blahsomethinglikethat.com. Try it.

It is a customer accepted markup. If everyone in a given market (say US) said nuts to TXT, then the prices would drop.

As an important side note... SPRINT USERS watch out for CASUAL TXT. Aka... press 5 to page this person...

Well, I think the under 18 crowd needs a rep here.

We like to use sms messages because

-Our phone is always with us
-Its the best way to contact someone in the middle of class
-We aren't always at our computer. If we were, we would use IM

how long until companies just provide a big fat internet tube to a mobile device and let the user make voip calls or use push-email?

I'm a 28 year old Tmobile customer, and I have the 1000 texts thing in my plan for $10 a month. Two months ago, I received and sent 800 texts. Some days, I've sent and received anywhere from 30-70 texts. It's just easier sometimes. Especially if I'm texting someone whom I know is adept at texting. Like I'll never text my parents.

Also, there're lots of people I'd rather text back and forth than speak with. Like my annoying sister in law. I can get rid of her in a few texts, but if she catches me on the phone, forget it - I'm on the hook for at least 20 minutes of blather.

mopar_man said: "Really? I call up Alltel's voicemail, they request my password and it plays my message(s). I press 5 or 6 buttons when I call it. How many buttons are pushed on during a text message?"

I press one. When I see my phone has a text message, I press the button which indicates that I would like to read the text message, then press it again to view that specific message( unless it's not the most recent one, but that's a given).
When I call voicemail, on the other hand, assuming that I'm using my cell phone( which doesn't require a login) I often have to deal with either
a) bad reception
b) unrecognizable diction
c) bad ambient noise, or
d) a myriad of all of the above. I also have to bother everyone around me by initiating a phone call. Viewing a text message is just faster and more polite, two qualities of which people need more these days...

Oh, and before anyone else says that viewing a text message is dangerous while driving, it's almost equally dangerous to use the phone while driving. That said, there are some huge benefits to using text messages, but the inequality involved here is just too great. The telecommunication companies have banked on our love of SMS and we're just their prey. Very little to do now but hope that Google comes up with some revolutionary new thing which sticks it to them, haha...

@spiderjerusalem: If 3p is a very rare price in the UK for a text message on Pay As You Go. When I was on Pay As You Go I was paying 10p, then 12p, and finally 15p (that's about $.30!).

Most subscription services offer a number of free SMS per month though, usually between 500 and 1000, so for a lot of people it's not really noticeable.

I'm 25 and am always texting. In general the UK are quite a heavy user of SMS.

Texts use a different channel to transmit then ordinary data so that might be one reason for the cost difference. Also the US is about 5 years behind the rest of the world when it comes to mobile communication. If you think that texts are the domain of kids less then 14 you're in for a shock. I'm in Ireland, a land of 4 million people. We sent about 4 Billion text messages last year. Premium rate texts, informational texts etc. etc. You'll get around to them eventually.

@wesrubix - SMS is not sent using AT commands. Many mobile phones allow you to communicate with them using the standard Hayes commands (or AT commands as you put it) - but this is not how the phone actually sends SMS messages and nor is it part of the process a typical SMS will go through.

SMS Messages are typically sent in the same way that the phone sets up a call - over the control channel which is separate from the voice data. For CDMA phones then ANSI41 defines how this works (see http://www.cdg.org/technology/roaming/Technology/ansi41.as... for example) and with GSM it is defined in MAP, part of SS7 - http://www.protocols.com/pbook/ss7.htm#MAP

SMS messages started off free (in the UK at least where the craze seems to have started), and were limited to within network (it was intended as a way for engineers to communicate with each other). Once it became popular, the networks opened up access to allow cross network delivery. Of course, as soon as this happened they twigged they could start making money and introduced charges per text message.

As for the overpricing - that is just market dynamics. People are prepared to pay extortionate amounts, so the networks will charge.

@JimXugle:

Big fat internet tube to a mobile device... isn't that the definition of 3G - http://eurotechnology.com/3G/ - which already popular in the UK, but almost ubiquitous in Japan and parts of Asia. Take a look at the phones for sale in South Korea if you want a glimpse at what the Western markets might see in a few years time.

Hey, let me give you a fact of life. The company isn't in business to make you happy, it's in business to make me, the stockholder and owner, money. We do that by providing you services at the highest cost you're willing to pay. I, the stockholder and owner, do not make money by giving away services at cost and have no god-given edict that demands I bend over backwards and kiss your ass for every 15 cents you give me. If you don't like it, form your own company that you own and offer the services for free to the whole planet and lose all of your wealth if you want in the process.

Isn't the argument that text massages are legitimately more expensive sort of dubious in light of the fact that you can send them for free by email? This page has the addresses: http://www.tech-recipes.com/rx/939/sms_email_cingular_next...

In fact, you'd probably be better off getting a sms-email-sending j2me program for your phone and using that to take advantage of the data rates.

Today it starts to pop up quite a few alternatives to the expensive SMS. I have seen a number of services offering instant messaging from the phone, e.g, Radarspot, which is charged as data traffic.

It will be really interesting to see how the telcos answers to these threats. Will they give up their cash cow, the SMS, and develop similar messaging solutions, or simply lower the prices, or will they ignore the threat and hope for the best?