AT&T just raised their price on SMS messaging.
AT&T now says that unless you’re subscribed to a messaging plan, they’ll charge 5 cents more for both text messages and picture messages. Now text messages will cost 20 cents and picture messages will cost 30 cents. The change takes effect March 30.
But Broadband Reports points out that the profit margins on SMS messaging borders on “criminal”.
Essentially SMS text messaging costs nothing. SMS uses the separate cellular signaling frequency, not the “payload” frequency used for calls or data. The control channel is used to set up a call. A kind of QoS delays SMS until there is no risk of congestion.
The bandwidth is under utilized and the overhead of 140 bytes is nil.
Sam Garfield of A Gthing Science Project figures if the bits were written out on paper and sent by the Post Office it would cost $307,072, compared to over $61 million if sent via SMS:
Given the standard SMS message contains up to 140 bytes, the user does the math and concludes that to send 2560 songs via his ISP would cost him $1, while it would cost $61,356,851.20 to send via SMS.COSTS OF TRANSFERING 2,560 MP3s:
TCP/USPS: $307,072 (Bits written out on paper)
TCP/SMS: $61,356,851
Cost has nothing to do with it, of course. AT&T and other cellular companies will take full advantage of SMS profits for as long as they can. Wikipedia says SMS was worth over 80 billion dollars globally in 2006 with an average price of 11 cents. Blog Runner has more on the high price of SMS.
