Thursday, December 11, 2008

WTF?

As anyone who still has a job is probably aware of by now, companies are trying to minimize the costs of doing business during these lean times. I got an e-mail from management at my job last week outlining a number of cost-cutting initiatives that have recently been put into effect. The one that caught my eye was an admonishment for employees with company-provided mobile phones (a club that I am not a member of) to stop texting so much. I've always wondered why texting is so expensive. After all, a single text message is at most a couple hundred bytes worth of data. A voice call is at least thousands of bytes per second. Based on the five minutes of research I just did, it appears that it's because texting is such a cash cow for wireless carriers. By charging ridiculously high rates for text messages, carriers basically force anyone who wants to use text messaging on regular basis to buy an unlimited plan, guaranteeing them an extra $5-10/month per customer over the life of their contract. Carriers can charge whatever the market will bear, of course, but any business that is built on constantly ripping off its customers is setting itself up for fall when someone comes in and challenges the status quo. At the very least, once Internet-connected mobile devices achieve critical mass, text messaging is going to go the way of the CB radio unless the pricing model is rationalized.

Postscript:
I've been sitting on this post for a couple of days and wouldn't you know it - Google has gone ahead and added SMS text messaging to Gmail. I don't this is going to put an end to extortionate text messaging rates, but I'm still holding out hope that Google/Android is going to finally force some sense into the US cellular phone market.

3 comments:

MDS said...

I despise text messaging. Every time someone sends me a text, I want to reply with, "Why didn't you just send me an e-mail?" But instead I just delete it.

dhodge said...

Srsly? I used to be skeptical of text messaging as well, but I've warmed up to it a little bit. It's less intrusive than a call, so it's useful in situations when you just need to send a quick message or are in a place where a voice call is disruptive or impossible. That being said, I don't use it very much because I never come close to using up all of the minutes on my plan but texts cost me $0.20 a pop.

dhodge said...

Interesting postscript: I sent an SMS message to my brother's French mobile phone and it only cost me $0.40. That may sound expensive, but it's only 2x what it costs me to send an SMS to a US mobile phone. International calls are generally marked up by a much larger multiplier, in my experience.