NEWS JUNKIE POST
Jun 15, 2009 at 12:01 amCell Phone Execs Will Face Questions On Text Messaging Price Hikes
Text Messaging Has Gone Up. Photo: NEWS JUNKIE
Those cell phone companies will have a lot of explaining to do Tuesday when they testify at a U.S. Senate committee hearing on rising text messaging costs. Representatives from Verizon, AT&T, and Cricket will be faced with questions on why those short 160 character SMS messages are costing the consumer too much.
Last September, U.S. Senator Herb Kohl of (D-Wisconsin) chairman of the Senate Antitrust Subcommittee expressed his concerns that the big cell phone companies may be taking advantage of consumers by upping the price of text messages in cell phone plans. He sent a letter to AT&T, Verizon, Sprint, and T-Mobile:
“Text messaging files are very small, as the size of text messages are generally limited to 160 characters per message, and therefore cost carriers very little to transmit,” Kohl wrote in his letter. “What is particularly alarming about this industry-wide rate increase is that it does not appear to be justified by rising costs in delivering text messages.”
Over the last few years, telephone companies have been hiking up the price for text messages from as little as one-cent per message to 25-cents or more depending if the text is plain text or a multimedia text with photo, video, or audio.
Text messaging can be cheaper if consumers add them as part of their cell phone plans. T-Mobile for example charges $19.95 extra a month for unlimited text messaging with most plans. But for consumers who opt to not bundle text messaging in their cell plans, they’re stuck paying steep charges for sending and receiving text messages.
According to a report by Information Week in September:
Kohl noted that Sprint doubled the rate of its text messages [in the fall 2007] and that the other three large cell phone service providers quickly followed suit. “It appears that each of (the) companies has changed the price for text messaging at nearly the same time, with identical price increases,” he wrote in his letter to the companies. “This conduct is hardly consistent with the vigorous price competition we hope to see in a competitive marketplace.”
Text messaging use in the United States has increased from 17 billion text messages in 2000, to 500 billion in 2004. Microblogging sites like Twitter which reach users by cell phone and web may possibly had an impact in increasing text message use even more in the past two years.
Senator Kohl is not going to be easy on the cell phone executives given his calls to toast GM and Chrysler executives earlier this month for consumer concerns that dealerships weren’t getting any help from the automakers.
Advocates with the Consumers Union have raised complaints to Congress about the unregulated cell phone industry. Joel Kelsey, a policy analyst, with that organization will also be at the hearing on behalf of US consumers, testifying before the committee. Here is an except from the Consumer Union’s website about rising phone bills:
What’s at stake is your phone bill. The average price of telephone service for residential customers in urban areas increased to $24.75 per month in 2003, a jump of more than $4 in just three years. We’re not getting more service for our money, just more add-on fees and surcharges. Consumers can expect to see continued price increases, due to the failure of public policy to promote robust competition, and proposed changes at the state and federal levels that will result in new price increases of several more dollars per month.
@DoloresMBernal Cell Phone Giants To Explain Senate Why Texting Is Expensive: http://digg.com/d1tq9q?t #newsjunkie #texting
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Once again teh Sheeple will get the short end of the stick and the big corporations will get their way. The law makers are bought and paid for!
RT
http://www.absolute-anonymity.us.tc
Hey John,
I have run into a lot of you spammers lately. Why buy my anonymity when I can get it for free, so your spammathon isn’t bought and paid for! Thanks for the crap post!
Brandvegn
Interesting how the cell phone carries would answer to that. It was about time someone investigated that. Should it be proven that they are overcharging us, it would be interesting to see a class-action lawsuit against the carriers.
Sprint was sued a year or so ago for charging undue disconnect fees to people who wanted to end their contracts. Any of you here use Sprint? I wonder if after they settled, they continued to charge $200 to end a contract.
I believe as a result of this (and other carriers doing the same) Congress passed legislation that requires them to prorate termination fees. I know Verizon started doing this at least a year ago.
Price of text messages quoted should be “…1 cent per message to 25 cents or more…”.
Thanks Bill. Made the change.
Also, the price of T-Mobile’s unlimited monthly text messaging plan is $14.99, not $19.99. Sent correction to author.
Not $14.99. Just double checked with T-Mobile, it’s $19.95. Made the correction. Thanks!
Its 14.99 for a single line, 19.99 for family plan
I think you mean .01 dollars and .25 dollars. .25 cents is a quarter of a penny, not 25 cents.
Bill:
Bill Aitch says:
June 15, 2009 at 6:59 pm
“Price of text messages quoted should be “…1 cent per message to 25 cents or more…”.
That’s exactly what it says.
Pete
No, the article says:
“as little as .01 cent per message to .25 cents or more”
copypasta from the article
of course it’s .01 and .25 cents, it’s Verizon math!
I have long been furious about this. But its hard to argue with them. If you really want a ton of texts, you can always pay for unlimited, but if you are like me and just do it occasionally, you get charged exorbitant amounts of money. What i would like to see is the ability to buy a texting plan from a separate carrier… require the phone companies to allow a separate carrier for text on your phone… that opens the door for all sorts of competition.
Interesting trade off…In canada text messages are relatively inexpensive….a $15 package will get you call display, voicemail and unlimited picture/text/video messaging….Data on the other hand is very expensive there are NO unlimited options, 500mb on its own is around $30….the best package out there which is promotional only is 6gigs for $30 but is only offered at limited times…
[...] Original post: Cell Phone Execs Will Face Questions On Text Messaging Price Hikes … [...]
I’m very happy with my plan, now for five years. I pre-pay any amount I wish directly from my bank account (24¢ service fee per payment) and talk & SMS until it’s gone. Talking is ~15¢/min, text-only SMS’s are 4¢ each if sent from my phone. There is also an option from the carrier’s website to send an SMS for free (for me and for the recipient). If I activate another service for 4¢, I also get an email address that people can send an SMS to me from their email account, also free after the 4¢ activation. Generally, I spend about $10-12/ month for my total mobile phone bill.
Oh. But, then, I’m living in the European Union where there is actual competition between carriers and regulation to keep criminals out of the industry. Sure be nice if someone could provide that information to Sen. Kohl so he can ask why American carriers are gouging their customers for more & more each month while the prices are dropping throughout the EU.
Its not perfect in the EU either, we still have extortionate prices for data without a bundle, high per-text costs, high 3G call charges, and networks not supporting the latest communication features like PTT or IM freely and openly because they know it will undermine their text revenue.
Its not perfect in the EU either, we still have extortionate prices for data without a bundle, high per-text costs, high 3G call charges, and networks not supporting the latest communication features like PTT or IM freely and openly because they know it will undermine their text revenue. Oh not to forget the mobnile companies are currently under investigation in the EU courts over roaming fees.
Dunno where in EU you are but here in Portugal. IM is given for free in most packages.
Vodafone for example has a package where you can send EVERYTHING unlimited to any other person with the same package. That means unlimited calls, text message, photos, video calls, messenger, videos and so on for just 10 euros per month.
To any other person outside that package it’s like 6 cents per text and 18 cents first minute of call followed by 5 cents every other minute. (and after first minute you’re charged every 10 seconds and not the whole minute)
Oh and you still get 1500 text messages per week for anyone from the same carrier but without the package.
I did some quick math, and it’s pretty astounding what we pay to use SMS.
I googled it and came back with an article at phonearena.com that said some teens in the US send as many as 2272 texts in a month. Let’s pretend that every single one of those messages used the maximum number of characters in a text message. That’s 1120 bits of data. That’s bits, not bytes. If you multiply by the number of texts, it’s about 2.54 Mb of actual data over the course of a month. That’s $7.80 a meg if you have a 20 dollar unlimited plan. Based on that math, downloading an MP3 from iTunes at SMS rates would cost somewhere between 20-30 bucks. Wow!
Insane! Thanks for doing the math and putting it in perspective.
I was with Verizon the past 2 years (9 years previously with Cell One>Cingular) and had the unlimited txt plan with 450 mins a month. Besides my own home being a deadzone, I hardly got my moneys worth of $70 a month. $70!!! good grief. So i went back to Cing.. excuse me AT&T, got rid of txt messages (not even accepting them) and now my bill is back down to $36 a month. Ahhhhh nice.
[...] http://mynewsjunkie.com/2009/06/15/c…g-price-hikes/ __________________ [...]
[...] View post: Cell Phone Execs Will Face Questions On Text Messaging Price Hikes … [...]
Am I the only one who thinks that maybe these guys have some more pressing matters to look into? Who cares how much text messages cost? I know of nobody who absolutely needs this “service”, just use email or try using the phone that you’re already paying for! What a stupid waste of time for the Senate. Anyone dumb enough to fork over money for texting deserves to pay through the nose.
Exactly – you have a PHONE in your hand – use it for Pete’s sake!
You also have FEET, and a MOUTH. If you want to talk to somebody, WALK to them and TALK. Why even bother with the PHONE????
you must be old school, or just old. text messaging is a key part of this generation, and a handy and useful way to communicate quickly.
actually text messaging is not a useful way to communicate… it wastes time. One 5-10 minute phone call amounts to a half a day or whole day of useless text messaging. I challenge any textaholic to write down a day worth of texting and see how most of it has no substance at all. Half of it is “Hey” “whats up” “lol” and various other messages to try and get the other person to send back a text that boosts their low self esteem!
My friends in Europe tell me that over there, text messages are free (unmetered) but voice is very expensive. Oh, and callers pay to call cell phones, even from a land line (you can tell in advance that you are calling a cell phone because cell phones are in special area codes). Over here we have seen voice get cheaper and cheaper while text gets more and more expensive. I guess we have to be prepared to pay something, but I think we deserve to pay something fair. Competition is supposed to create fairness (well, at least lowest profitable costs), but somehow it hasn’t. Even number portability didn’t really help. I avoid using SMS by using Skype and IM services over my unlimited data plan. SMS has one advantage in that it works in the background no matter what else is happening on my phone…even if it’s asleep. Assuming that phone OS vendors can fix the inherent limitations of IM, then “unlimited data” plans become a way around SMS charges.
Like you, I enjoy using Skype for those sorts of things. Skype on mobile devices is a very cost effective way to communicate, as long as you’re not going over your carrier’s service limits.
This seems to be mostly speculation on Senator Khols’ part. Is he an expert in the mobile phone industry? So, because he thinks text messages can only be a certain number of characters, then the cell phone giants must be overcharging customers? Perhaps he will be given a nice piece of humble pie after the hearings when the cell phone companies show him why they charge this much for text messaging. And for the record, to date, T-Mobile only charges $.20 per text message.
I think the real travesty in the telecommunications industry is how land line companies do not offer free long distance as apart of their packages. They should investigate Bell South for charging customers upwards of $50 a month for local calling and no included long distance. But again, I don’t have all the facts about their systems. Perhaps I’ll put my foot in my mouth and demand a hearing so land line companies can explain themselves.
[...] Cell Phone Giants To Explain Senate Why Texting Is Expensivemynewsjunkie.com [...]
Interesting trade off…In canada text messages are relatively inexpensive….a $15 package will get you call display, voicemail and unlimited picture/text/video messaging….Data on the other hand is very expensive there are NO unlimited options, 500mb on its own is around $30….the best package out there which is promotional only is 6gigs for $30 but is only offered at limited times….
What the hell is call display? I’m pretty sure that comes standard in the US, along with voice mail.
$15 will get you a pretty good text plan down here.
Interesting that Cricket is mentioned in the second sentence and never again … neither in the article text or blog posts so far. I wonder how the Cricket testimony stacked up to the other Execs. My Cricket plan is $35/mo. [plus the usual rip off taxes/fee$], and provdes unlimited local talk time, unlimited texting, unlimited picture send/receive, no contract and therefore no cancellation penalties! How does that stack up against the “big boys.”
I do pay a reasonable fee/min. for long distance calls that has not escalated in the three years I have owned a Cricket phone. Local calls are anywhere in my “region” … in my case, anywhere from Colorado Springs to Fort Collins, CO … about 100 miles.
This is a great example of free enterprise at work, if you ask me. However, I’m glad there is regulation to keep everyone from “going for the gold” out of my pocket like the big players in this game do.
To put things in perspective we pay the equivalent of $0.01 / text message out here in Pakistan.
And of course, no charge for receiving text messages.
Text messages are free for the Cell phone company to send. They are sent as part of the control channel.
http://mobile.slashdot.org/comments.pl?sid=433536&cid=22219254
besides gouging users, there is no reason for the price increase..
[...] source [...]
it’s no different from the cable industry.
they overcharge BECAUSE THEY CAN. it all goes back to ‘government’ (or lackthereof). these things don’t just happen by themselves overnight.
[...] Source:http://mynewsjunkie.com/2009/06/15/cell-phone-execs-will-face-questions-on-text-messaging-price-hike... [...]
What a waste of time. If you use a lot of text messaging, then an unlimited text plan is what you need. Then you don’t have to worry about the cost of each individual text message.
The only people that are bitching about the price of each text messages are people that don’t want to pay the up front 10-20 dollars for the unlimited text, and call into customer service each month trying to get credits for charges.
Take some f’ing responsibility folks.
Its not about what plan your on or what plan you should get, its that cell phone companies are charging people outrageous fees for something that is free. Get your head out of your ass.
Joseph,
Yeah I love having people walk all over me… Your right its easier to just bend over and give in. I do not want to have to pay 10-20 more dollars a month if it is not a fair price! It is obvious that it is price gouging when in 3rd world countries they pay less than 1 cent to send and receive text messages.
Hi guys!
Text messaging is really great since one can send quotes and personal messages to friends and loved ones. But of course, it comes with a price.
Here in the Philippines, it costs Php 1.00 to send a text message. Php 2.50 for MMS and 20 philippine pesos per hour of mobile web surfing. ((Php 48.27 to USD 1.00))
It’s quite cheap here but many people send many messages per day. I believe Filipinos send one of the highest number of text messages per day.
What’s more, Php 20.00 for one day unlimited texting for sending messages to phones under the same carrier and there are other unlimited offers also.
Well, it depends on where you are. I hope the carriers in the US can justify their claim for increasing the price.
God bless everyone.
[...] News Junkie] This entry was posted on Tuesday, June 16th, 2009 at 7:56 am and is filed under Other Mobile [...]
Text messages are a convenience and are charged as so… the same can be said I think for 20 oz sodas sold in vending machines. A 20 oz Coke is $1.25 yet I can go to the grocery store and get a 2 liter for the same price. Am I getting ripped off buy getting less product for the same price? Well, not necessarily if it is convenient to me to have that 20 oz. If it is convenient for me to text then I will but I will have to deal with the charges. It would be nice to see the US Senate looking into more pressing issues, but with lifetime healthcare for themselves and a nice pension I guess they have nothing better to do than talk cell phones???
IT’S ABOUT TIME. This is one of the biggest scams going today. SMS travels on the Control Channel which is what links your phone to the tower. Without the control channel the network doesn’t know where your phone is or that it’s even on. What this means is that it costs the cell provider VERY LITTLE IF ANYTHING to offer you SMS because it uses the already existing Control Channel to transmit the data.
Learn more: http://communication.howstuffworks.com/sms.htm
Cali Lewis on SMS costs: “If I was to download a song, and a song is about four megabytes, using the same calculations, it would cost me $6,000.”
Keep on pressing your officials. SMS is a scam and needs to be stopped. When you pay for sending and RECEIVING messages, you know something is wrong. If such a practice is allowed, how long until other companies adopt this business practice? I can just see the USPS charging 40 cents to the sender and receiver of junk mail….
[...] Link to an article about the hearing. tweetmeme_url = ‘http://whenwillapple.com/blog/2009/06/16/cell-phone-carriers-to-answer-why-texting-is-so-expensive-before-senate-committee/';tweetmeme_source = ‘whenwillapple’;tweetmeme_style = ‘compact’; yahooBuzzArticleHeadline = “cell phone carriers to answer why texting is so expensive before senate committee”;yahooBuzzArticleSummary = “”;yahooBuzzArticleCategory = “science”;yahooBuzzArticleType = “text”;yahooBuzzArticleId = window.location.href; [...]
Alright all you sheeple go ahead let the government control everything…
[...] looks like the cell phone companies will be answering questions today in a US Senate committee hearing on the rapid rise of text messaging costs to [...]
you don’t have to get an unlimited plan. verizon offers a text plan for as little as $5 bucks for 250 messages including mms. if you use enough text to pay more than $5 on a per message rate and don’t get a bundle you are an idiot. why don’t people start being reponsible for their own actions and usage. i’m so tired of people wanting credits all the time.
Verizon Wireless has about 6 servers that handle the entirety of these messages. They’re all big servers with lots of cores, and as such cost several tens of thousands each, but even then they made their money back within hours of these servers going active.
Saw the servers with my own eyes. It’s appalling that they charge so much for technology which isn’t even as expensive to maintain than some of the personal servers under the desks of some employees.
Let’s do the math:
1) SMS contain up to 160 **7-bit characters** per message
(7-bit characters are smaller, but mean you only get 128 possible
character values instead of 256, which would be 8-bit)
2) 160 [characters] * 7 [bits per character] = 1120 bits per message
3) 1120 bits / 8 [bits per byte] = 140 bytes per message
4) 140 bytes / 1024 [bytes per Kilobyte] = 0.13671875 KB per message
5) At $0.20 per message, that’s $1.46 per KB
6) $1.46 * 1024 (KB per MB) = $1497.97 per MB
7) Round to $1500.00 per MB, since most of my messages aren’t the full 160 character limit (and it’s easier to read).
On the other hand, I use about 100MB/month on my data plan (over Edge on my 2G iPhone), which costs$20/m0, so about $0.10 per MB.
To summarize:
Txt’s cost me about $1,500/MB
Data costs me about $0.10/MB
So,
Txt messages cost me about 15,000 times more than data.
FIFTEEN THOUSAND TIMES MORE!
Good luck defending THAT case!
Typo– I use about 200MB/mo.
you should go back to school
[...] Cell carriers to go before Senate Subcommittee over high texting charges (MyNewsJunkie) [...]
Text messages being expensive ? I’m from India and we have Govt. Cellphone services giving us 2000 short messages free for the whole month. And each extra message costs 0.20 INR. (1 Indian rupee = 0.021022 U.S. dollars)
[...] Cell carriers to go before Senate Subcommittee over high texting charges (MyNewsJunkie) [...]
here in Canada one of the major cell carriers (Rogers) is talking about upping their text costs. probably because they want to cash in on all the people using twitter on their cells. At least in the US the gov is asking the big cell carriers for explanations to the high costs.
What infuriates me is that when I first switched to T-Mobile I received numerous texts intended for the former owner of my cell phone number. I called T-Mobile to try to refuse texts to my phone and was told that was not an option. So I don’t pay for the plan and can’t stop people from sending me texts that T-Mobile tells me I have to pay for. They eventually gave me a credit and I was able to stop the flow of texts over time, but the fact that they make people pay for texts they have no control over is criminal.
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[...] Source:http://mynewsjunkie.com/2009/06/15/cell-phone-execs-will-face-questions-on-text-messaging-price-hike... [...]
[...] NEWS JUNKIE reported on Monday that today’s hearing would seek answers from the cell phone companies on why text messaging prices have gone from costing one-cent to as much as 25-cents in just five years even though transmission of text messages costs cell phone companies less than minutes. [...]
[...] Cell carriers to go before Senate Subcommittee over high texting charges (MyNewsJunkie) [...]
The new StraightTalk plan I picked up last week (from Tracfone) gives you 1000 minutes, 1000 texts and 30mb of data for $30! That’s a HUGE reduction in charges. 2c a minute and 1c a text. If they can give it at such a low price, why can’t the major contract carriers?
SMS text messaging actually saves bandwidth in comparison to voice … it should be a *free* service included as part of a cell phone package, but since there’s a demand for it and consumers are willing to pay for the service, corporations will always see a resource to exploit, rather than a basic service to deliver …