First of all, I never text and probably never will…just my generation I guess.
However, I see these ads for fees for texting and am trying to figure out what the rationale for charging more to text than to talk over the phone?
I mean, isn’t it the same technology? Data being sent and received?
Maybe it is a stupid question, but am I missing some special reason to charge extra to have data sent and received as text instead of voice on a cell phone?
Do you have an example of pricing? Here in Australia texting is way cheaper than calling on most plans. I have a real cheap plan and have never paid for a text message. I am in my 50s but once I started using text messaging I discovered it’s perfect for people like me who don’t talk much on the phone anyway.
I think the extra fees for texting are pretty ridiculous. I mean, I can send a full email on my iPod at no charge, yet it was costing me 10 cents per text (incoming or outgoing) on my cell phone. When I saw my $90 phone bill (normally $30), I changed my plan to 400 texts per month for $5. Obviously, this wouldn’t have covered last month’s charges, but I am making an effort to cut down on my text messages.
Why not charge for texting? Cell phone networks are one of those businesses that have such an enormous entry fee that there is very little competition, so you can get away with stuff like this.
My little brother and I (and both my parents, too, but they don’t text) get unlimited texts for $10 per month (total). I average 50 texts a day, most of them when I’m at work, so that breaks down to less than a penny apiece. For (basically) unlimited talk minutes, it’s $40 each. I wouldn’t say it costs more to text, but if you don’t have a package it can be brutal.
I think the rationale is “they can”.
Texting requires additional infrastructure. Yes, it’s data being sent and received, but it isn’t the same technology, unless you want to call everything “cell phone technology”.
Still, the best answer is the one given already: “Because they can.”
I have Verizon as a family share plan with five members counting me. Some teenagers(and older)send hundreds, even thousands :eek: of texts per month. Parents quite often are startled to see bills of hundreds of dollars instead of the $40 or so. We pay a flat $30/month to cover unlimited in and out text messages for the whole plan. Worth it.
As don’t ask says, text here is a lot cheaper than ringing people- the flagfall alone on the three major cellphone networks in 29c (before you even start talking to anyone), vs. 25c for a Text Message.
Most people (sensible ones, anyway) are on a cap plan anyway, which really makes most of the actual charges irrelevant at the end of the day.
As has been addressed already cell phone companies charge for text messages the same reason people climb mountains, because they’re there.
Text messaging is very profitable from the cell phone company’s perspective. You have people that pay to be on packages that don’t use them, (they give us a MRC (monthly recurring charge) and don’t use the service) and you have people who use them who are not on packages (they pay as much as .15 per txt x hundreds of texts). That is a lot of income that would not be there if we didn’t charge.
The front end of the cell phone world is not very profitable at all. Almost every phone is extremely subsisted, sometimes hundreds dollars and any place we can make up the difference helps. We actually have something called Buy Down, which is the amount I am expected to loose each month on selling phones (both new activations and upgrades). The closer I can get this number to 0, buy calculating in things like accessories sold and other MRC’s, including text messaging, the better my store is doing.
For example your Motorola RZR V3 is sold normally for about $50.00 but during Christmas we have it here for free. My cost to buy it from Motorola is $124.37. Every time I sell a RZR for free I loose $125. One of the ways to help balance that out is to calculate in any additional services you might have. So if you are on a $39.99 plan I don’t even see the return on the investment of your phone for 4 months into your contract. That doesn’t even include things like operating costs or the costs of doing business that’s just for selling you the product. Things like txt messaging help to keep the cost of phones low for everyone.
I give no guaranties on the spelling or grammar of the above post. I have yet to be properly caffeinated this morning. Thank you for your understanding 
In reply to Naita the infrastructure for SMS (at least in GSM land) has been there since the inception. The wikipedia article has more detail but in essence, GSM included a 140 byte space inside the data packet for future use. This was then adopted for SMS purposes with the original intention of using it for Operator to Customer communication e.g. You have a voice mail.
One of the reasons that the cell network operators love SMS so much is that it’s essentially free for them to provide, as shown by the 90% average profit per SMS (ref. wikipedia article).
tim
Doh - edit window. The SMS data size is actually 140 bytes but as a 7-bit encoded alphabet is used (in most Western locations) then 160 characters can be sent.
tim
Europeans tell me that in Europe texting is cheaper than talking. Some that I know, especially the younger ones, seem to be addicted to it. They have to text every single pointless thought they have to someone somewhere.
In the States it took a while to catch on, so maybe that’s why they made it more expensive. But if you text a lot, you can usually get an unlimited plan that’s not so expensive.
140 bytes @ $.20 per (for me) adds up to…
$1.42 per kilobyte, $14.20 per megabyte of data.
Worse than AOL in the old days. Waaaay worse than most phone data plans, which tend to be around a cent or so per kilobyte!
Thats a lot of markup.
It is a huge huge mark up. As noted it is only a small amount of data. A voice call uses around 5 or 6 K bits/sec on average it is higher when you are talking but about 1/2 the time you are listening. They also have the benefit that they can be delayed by a few seconds or minutes so the scheduling of them is easier.
There are starting to be some cracks in the pricing. Some companies like cricket have unlimited texts with all plans.
Europe never had any pay-to-receive system, for either voice or text, which is one of the main reasons for takeup having been much quicker than in America. The social aspect of texting, of the knowledge that recipients will be happy to receive a message, is vastly different when they aren’t paying anything to do so.
But it’s still free to receive, on most U.S. plans, isn’t it? Way back in the beginning, when I realized my cell phone could receive text messages for free, I suggested coworkers text me if I was driving about from work site to work site. (It didn’t take airtime to read, and was easier than calling voice mail for a message.) But at that time, almost nobody I worked with realized that they could send me a text–not even from their computer. So I put on my business card a “mobile email” (the phone number at the carrier’s domain). Even today, while driving, I’ll get calls from people who are sitting at their desk in front of a computer, just to tell me, “Stop by my office when you get back.” I think in the U.S. many people, especially those who didn’t grow up with text capability, don’t trust texting. They want to at least hear your voice, either live or on voicemail, to be sure they’ve gotten through. It certainly can’t be because they think I won’t be happy to receive a text message.
So I imagine, as to the OP’s question, that, until recently, still not enough people in the U.S. used texting enough for them to think, “I should pay the $4.99 a month for unlimited texting.” So the phone company says, “Okay. But if you do want to text, it will be 25 cents a message,” or whatever. It sounds cheap enough to the prospective customer, and even if they use it only once, 25 cents is more than nothing. And the phone company can hope that maybe they’ll get into the habit, and use it a lot more.
As texting becomes more and more the mode of idle chatter of bored adolescents, who are now growing into their twenties, I’m pretty sure that soon unlimited texting will become a default built-in service of most cell phone plans in the U.S., with a built-in extra charge of about five dollars a month, perhaps decreasing in the face of tougher competition.
No.
As the linked wikipedia article describes, text messages go through a Short Message Service Center, which is what I called additional infrastructure in my post. Yes, SMSCs have been there since the inception of the GSM-network, but they have to be scaled to accommodate the number of SMSs on the network. You could in theory run your network without them, and not offer texting.
Yes, they’re probably cheap to run and upgrade compared to the cost of SMS-messages, even if the 90% average profit statement is labled “citation needed” in the article. But I already aknowledged that in my post, didn’t I?
This makes a lot of sense to me. I used to hate it when people would text me to ask me a simple question. I’d get charged like .25, and I'd either have to type out a reply and pay another .25, or make a phone call. The text message had an added charge and took longer.
I now have free texting included with my phone contract, so I mind less. I still only use them very sparingly. Mostly when I want to call someone at night, I text first to see if they are awake. I might send 3 or 4 a month.