Text messaging inflation

There’s lots of talk these days about inflation. Prices for gas, food, etc. all going up…. What about text messaging/SMS?  Since AT&T announced the iPhone pricing plans last week, lots of folks have weighed in about the price of a text message.  All US wireless carriers have steadily increased the price per message as a way to increase their best source of “data” revenues and to push consumers to sign up for montly packages of text messages which brings them more recurring revenue and increases ARPU. Text messages now cost as much as $.15 or $.20 per message.

Techcrunch wrote a post estimating the charge per Megabyte for an SMS from At&t being $1,310. While the calculation might not be exactly correct, it is certainly the case that the cost per transmission of data is much more expensive than other mobile data services, e.g. the iPhone’s $20 for unlimited data plan (e-mail & web). Textually.org reports that “Nigel Bannister, a space scientist at the University of Leicester in Britain, has concluded that sending a text message costs at least four times as much as transmitting scientific data from the Hubble telescope.”

There has definitely been some uproar from wireless customers.  A class-action suit was even filed. Others have used the price increases as a way out of contract commitments to their wireless carrier.

Even more ironic is that the technology SMS uses is the voice part of the wireless network, not the data network.  So wireless carriers use the price increases and revenues from SMS to justify to Wall St. their massive investment in their data networks, even though the two are unrelated.

I certainly have no issue with carriers charging what the market will bear for services, but when they’re effectively state granted oligopolies seemingly colluding to increase prices and actively blocking free/low-priced alternatives, one loses some sympathy.  As customers purchase more smartphones, carriers will face more questions like these:

• I can send unlimited email and use the web for $20 unlimited data but a 160 character text message costs me an additional $.20 or monthly package?
• I can download a full song for $.99 or less but a 10 second clip for a ringtone of the same song costs me $2.99?

Hopefully text messaging prices will normalize and/or start to be included in broader data packages.  In the meantime, let’s hope people like Paige Horne (a 15-year-old from Ohio, who averages about 15,000 texts a month), subscribe to a monthly text messaging package/plan.