Just As I Thought

A billion dollars cents at a time

Phone companies just burn me up. They’ve been nickel and diming us out of huge sums of money, collectively, since… well, for a long time. Think back to the days when you were not allowed to buy a telephone, but had to lease it from the phone company. Their excuse was that connecting “unregulated” phones would damage the network. Flash forward to today, when the phone companies — now in the mobile realm — keep saying the same thing. Of course, the recent ruling that cell companies must allow customers to “unlock” their phones means that we may find that the old “subsidize the phone then charge huge sums under contract” model is on the way out.
Still, they find ways to make tons of money in tiny increments. Take the brouhaha over Cingular’s price hike for SMS messages. Text messaging is a huge cash cow for these mobile companies — as of January, Cingular will be charging a whopping 15¢ for each message, both outgoing and incoming. It’s worth noting that you can’t simply shut off incoming SMS messages or choose which ones to accept.
There’s simply no way that it costs 15¢ to process a short test message through the network; the data transmission is so much cheaper and easier than voice traffic; I’d bet that an SMS message costs the company a small fraction of a cent.
Still, every message is generating huge profits. Think about it: if I send an SMS, I’m charged 15¢. And the recipient is also charged 15¢. Multiply that by, say, 59 million subscribers (as claimed by Cingular) and you have $17,700,000 in SMS charges if each subscriber sends a single message.
I’m just saying.

1 comment

  • What’s really sad is that Cingular really needs that extra revenue from SMS. The subscription/post-paid business model that Cingular, Sprint, Verizon, and Tmobile have is really horrible. They’re stuck in this eternal prisoner’s dilemma game.

    Sucks to be them, and it sucks to be us.

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