Everyone knows that movie popcorn is one of the biggest ripoffs, right? It turns out that movie popcorn carries a 600 percent markup. The biggest ripoff: text message beats movie popcorn article tells that the text messaging has a much bigger markup. Text messages themselves, are just tiny blips of data being transferred to and from mobile devices and don’t even cost the carriers a full penny to process. So with text message an operator gets a 6,500 percent markup from 20-cent message. This number only considered the text message delivery cost. It could be possible (and very probable) that charging for text message service costs considerably more than the service itself.
But don’t expect anything to change anytime soon because operators are making good money on this as people are buying the product well at the current pricing. Those of us who pay for flat-rate, all-you-can-text plans don’t worry about cost of single text message.
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Tomi Engdahl says:
Free Texts Pose Threat to Carriers
http://www.nytimes.com/2011/10/10/technology/paying-to-text-is-becoming-passe-companies-fret.html?_r=1&pagewanted=all
At a time when e-mail and many other forms of electronic communication are essentially free, wireless carriers are still charging as much as 20 cents to send a text message to a phone, and another 20 cents to receive it.
Paying so much to transmit a handful of words is starting to look as antiquated as buying stamps.
This highly profitable product was something of a happy accident for cellphone carriers.
There are now a growing number of ways to bypass text-message charges using an Internet connection
“It always comes down to the economics,” said Greg Woock, the chief executive of Pinger. “Free is a compelling price point.”
“From a business perspective, customers still need a data plan to connect to a device,” Ms. Raney said. “They are only making choices on how they are using the data.”
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Tomi Engdahl says:
Text Messaging Is in Decline in Some Countries
http://bits.blogs.nytimes.com/2012/01/01/text-messaging-is-in-decline-in-some-countries/
Perhaps to the chagrin of cellphone carriers, all signs point to text messaging’s continuing its decline in several parts of the world.
In Finland, there was a significant drop on Christmas Eve, one of the busiest days of the year for texting, Tero Kuittinen, a senior analyst at M.G.I. Research, wrote in a blog post for Forbes.
Cellphone customers on Sonera, a Finnish mobile network, sent 8.5 million text messages on Christmas Eve, down from 10.9 million on the same day the previous year, Mr. Kuittinen said, citing a report by the Finnish national broadcasting service. DNA, a Finnish carrier for younger customers, also experienced a decline, with subscribers sending 5.6 million messages, down from 5.9 million in 2010.
In Hong Kong there was a steep decline in text messaging on Christmas Day
Australians, too, sent fewer text messages
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Tomi Engdahl says:
At the turn of the millennium, foreign journalists were marveling at North, mobile people, who does not speak, but to send text messages. Today, text messaging is old-fashioned.
SMS final descent has begun because of smart phones. With smart phones people can send messages cheaper with instant messaging services such as mobile Skype, WhatsApp and iMessenger.
Among Finnish iPhone users text messaging is dropped in October 2011 and August 2012, as many as 13 per cent.
The drop is huge, especially when you use data services at the same time increased by 68 per cent.
“It is quite possible that the iPhone’s easy and fun to iMessage-system is rapidly changing the way consumers use a mobile phone”
Individual SMS messages grew within Finnish company mobile connection up 20% in the spring of 2011. “The next fall, the volume began to shrink – and it was already pretty sharp decline in early 2012.”
The new world is enough challenge for the operators. And change not only Finnish. Research firm Ovum estimates that smartphone users are turning to text messages over a data link used for instant messaging services and this will will cause operators to pay a turnover lost globally in more than 40 billion euros by 2016.
Source: http://m.tietoviikko.fi/Uutiset/Tekstiviestien+alam%C3%A4ki+alkoi
SMS test message turns 20 years old in Dec. 3 « Tomi Engdahl’s ePanorama blog says:
[...] been very profitable business for mobile phone operators and making them lots of money. And this very profitable business that has been growing and growing for long time, but now the growth seems to be [...]
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