Marc Archambault, Catherine Archambault

"Texting is the closest thing to pure profit ever invented" - Sir Chris Gent, founder of Vodafone.

Mobile text messaging, also called short message service (SMS) has been around since the introduction of digital mobile phone service. For only a few cents, you can send a message of up to 160 characters to another mobile user and the cost is usually less than that of a typical voice conversation.

Costs to consumers vary widely depending on monthly plan and carrier, typically between 5 and 25 cents to send and receive. Some carriers, such as Virgin Mobile Canada do not charge to receive text messages.

What should outrage consumers is that carriers enjoy a virtually unlimited profit margin on text messaging as they incur virtually no incremental costs due to text messaging, other than billing and land transmission, which is extremely small due to the size of messages.

The text message operates in a portion of the communication protocol reserved for tower to mobile communication. This space is normally used to dial and receive calls and is otherwise not usable.

Nigel Bannister from the Univeristy of Leicester in Britain calculated that on average a text messaging costs USD 734 per MB while transmitting an image from the Hubble space telescope costs only USD 166 per MB.

So why are we paying so much for text messaging and why is the CRTC not intervening? While on the topic of the CRTC why is it allowing mobile carriers to charge Canadians for a system access fee which is reality has not existed for about 20 years?

 

References:

http://thelede.blogs.nytimes.com/2008/05/12/costs-of-text-messaging-vs-space-transmissions/

http://www.nytimes.com/2008/12/28/business/28digi.html?_r=1

http://www.thestar.com/Business/article/258049