Who pays by the text? Don't most plans include a large number of free SMS messages?
Besides, this guy's analysis is very flawed. For one thing, SMS messages don't take the same path as data. They can't, since so many people (still) don't have smart phones. Also, the idea that because one kilobyte costs x that one byte ought to cost x/1024 completely ignores setup and fixed costs.
What are the fixed costs for SMS? Aren't they using infrastructure that was setup for the voice network? Can you really call the cost of setting up a new cell tower a 'fixed cost' of SMS (i.e. doesn't it also carry data and voice)?
Well, the money has to come from somewhere. You say SMS uses infrastructure that was set up for the voice network. But you could just as easily have said voice uses infrastructure that was set up for the SMS network, which would make SMS a bargain and voice overpriced.
Mobile carriers put enormous amounts of money into their infrastructure. Billions and billions, on top of the tens of billions they paid for spectrum. And they're not charities, so one way or another all that's going to get billed to customers, whether it's voice minutes, SMS, data, or plans with bulk minutes/messages/MB.
> Well, the money has to come from somewhere. You say SMS
> uses infrastructure that was set up for the voice
> network. But you could just as easily have said voice
> uses infrastructure that was set up for the SMS
> network, which would make SMS a bargain and voice
> overpriced.
The primary motivation for rolling out the cell networks was to provide voice coverage, or else SMS wouldn't be a hack on to the GSM protocol and we won't have things like a 140 character limit. Also, implementing things like E911 take a lot more money than sending 140 characters of text through some control channels, even if it is a switched connection.
This is hardly a "you say tom-ay-to; I say tom-ah-to" sort of situation. Using your logic we can attribute the roll out of phone lines as a 'fixed cost' of dial-up networking, but I doubt you'll find many supporters in the idea that all those lines were laid for the expressed purpose of dial-up and that analog voice calls are just 'piggy-backing' on the dial-up lines.
> And they're not charities
Where did I claim that they are not allowed to make a profit? I was just generally curious as to what fixed costs could be attributed directly to SMS, seeing as the majority of the infrastructure was rolled out for voice or data.
The primary motivation for rolling out the cell networks was to provide voice coverage, or else SMS wouldn't be a hack on to the GSM protocol and we won't have things like a 140 character limit.
Before there was voice, there was paging. I'm not super familiar with GSM, but I know for CDMA the reason SMS messages have a small fixed size is they used to go out over the paging channel. I don't think that's the case any more for CDMA. I'm kind of surprised it is for GSM.
In any case, the point is there's no objective way to untangle costs in an item that has a large implementation cost but provides more than one service.
Besides, this guy's analysis is very flawed. For one thing, SMS messages don't take the same path as data. They can't, since so many people (still) don't have smart phones. Also, the idea that because one kilobyte costs x that one byte ought to cost x/1024 completely ignores setup and fixed costs.