that is highway robbery.

Not unreasonable?!

as adam sandler would say, “Fu** me in the goat a**

Way to make up some numbers and go for sensationalist blogging. This just in, just because the data only covers X amount of space doesn’t mean that’s all that needs to be transmitted. Think about overhead. Absolutely terrible train of thought. Yes, AT&T is probably charing much more than they should, but your numbers are pretty far off the mark.

Can you guys do an analysis of the family plans for the iPhone. The prices seem completely out of wack.

If you were to get 2 iPhones you would be way better off getting 2 individual plans ($69.99 x2) then getting the family plan (129.99) since you would get much more minute for only $10 more. Also how does a family plan work with 1 iPhone and 1 normal phone.

I currently have a blackberry and my wife has a normal phone. We are on a family plan (700 minutes) and I have unlimited enterprise data ($49.99) and our total bill is only $125. How is the data for the iPhone cheaper, but the family plan more expensive.

Why do they still charge for text messages in the USA. They are free and have been free for forever in Japan.

No Google Talk. iPhone sux.

@#4 Your a sensationalist commenter. Which is worse?

Like Dave said earlier, SMS also has overhead. Any data transferred over certain protocol, e.g. TCP/IP will have bits in the headers (at least) to indicate various status, messages, boundaries, etc. Each SMS will be well over the 160 bytes you are looking at, so it might cost about half of the original $1,310 per your calculation. It’s ok to show off your math skills but please get the facts straight first.

BTW, it’s ok to diss AT&T anytime they charge an incoming SMS.

SMS are not 160 Bytes, but 160 US-ASCII 7-bit characters long, which makes a SMS message 140 Bytes long.

AT&T also charges $0 per megabyte:
$20/infinity = $0

#4: overhead or not, it doesn’t change the order of magnitude. SMS is the secret sauce of “data revenue” today and you bet carriers are worried about mass-adoption of data-based IM or location based social services (why LBS? think about how many SMSs you send involve “where are you?” “you hear yet?”)

yep text message should be free

Ahhh, maybe this is why Comcast and other ISPs don’t like bittorrent traffic. They are using some sort of “special” internet that is WAY more expensive than the internet that gets into our homes. (Like a server internet?)

I’m envisioning diamond fiber optics wrapped in gold and over braided with platinum. Those things don’t pay for themselves you know…

This is the reason I don’t own an iPhone- AT&T has rapacious calling plans. After adding internet access and SMS, you’d better be ready to bend over for AT&T.

I’ll take my chances with a Gphone and Andriod from other carriers.

.net rocks talked about this on a podcast awhile back. Text messages are the most expensive data per byte for users, but it costs almost nothing for the carrier. They just tack on the bytes to the end of channel that they already have running. here is a link to the podcast http://www.dotnetrocks.com/def.....howNum=327

Or they cost $20 for Unlimited Megabytes. I guess you choose your negative perspective.
Pretty dissapointing to see on TC.

That is crazy ridiculous, never go with pay as you go plans! You end up paying much more than you think you will.

I character equaling one byte is why Web 2.0 is awesome.

Most of you won’t understand why, though.

I won’t argue that the price is a rip-off and not related to actual transmission costs and sure it’s crazy expensive. But it’s priced as a message/transaction. Not as bulk data. It’s a different animal that actually travels over a different network.

On the overhead theory all information coming from the phone is data now. Its all digitized. So a text message takes much less bandwidth than a conversation or an “real” internet data usage. How does that work? They should encourage text messages.

those bastards. what the hell is wrong with them. people aren’t going to take this crap much longer. I can’t wait for a web 2.0 company to knock them on their ass for fleecing consumers this way

Yeah like that’s a good strategy for growing the high end of the market… they don’t get that if they let it grow there are lots of other ways to make $ off a whole new class of applications & data. For all the excitement that has been generated among mobile developers & startups this certainly gives one pause (again).

it should be noted that in the graphic it actually says .20 cents, as in 5 messages for 1 cent.

but i’m sure they mean 20 cents, they’re just stoooopid. agree with @22 - somebody capitalize on this horrible inefficiency already!

if you consider the fact the person receiving the txt message also has to pay the same price, given that receiving a txt message isn’t free, then you are looking at up to $2621.44/Megabyte. this is completely ridiculous……

@19 I hear ya.

Using that same logic, on the unlimited plan infinity MB costs $0/MB

When have phone companies not been thieves?

There was a story a while ago about someone from the Uni of Leicester that worked out that it was more expensive per MB to send an SMS message than to download data from the Hubble telescope.

One of the reports on it here: http://www.physorg.com/news129793047.html

Are you crazies seriously defending the pricing?

Data is data is data. If I’m paying $30 a month for “unlimited data”, I should not be paying one f’ing red cent more for text messaging. AT&T is not the only carrier screwing us, by any means, so I don’t mean to single them out, but paying for SMS on TOP of an “unlimited data plan” is bullshit, plain and simple.

We won’t be paying for text messages after July 11th. Just as with my blackberry I always used bbm which works internationally for free, iphone will have the same thing in the app store. Hopefully its not just chat though. I want something thats attached to my contacts as another option besides Test message or email.

1MB/Month = 6000SMS/Month = 200 Per Day If you send/receive that many, get the unlimited plan.

@31 (=jason):

You’re assuming Apple won’t block all those sorts of apps.

Can you say bend over with a smile!

iPhone fanbabies are oblivious to pricing or getting ripped off. Wait until they start surfing with their new 3G and get a bill for $10,000.

Is it possible to disable incoming SMS ?
I never send any SMS, and don’t want to receive any.

I’m with @32. Gotta say this is a pretty ridiculous post. It’s simply an option for those that don’t want to commit to a monthly amount. A handful of individual messages a month is still less than the lowest monthly subscription amount.

It doesn’t say 20 cents. It says .20 cents, or 1/5 of a cent. Who knows whether they know their math or not, though. See “verizon math” debacle for context.

The article and author’s findings are absolutely rubbish. What’s next? How much does 1MB of voice cost over the phone? ha-ha. Article while saying something means nothing. If one goes shopping for SMS plan, he never keept/keeps/will keep in mind cost of 1MB. Because of why? Because this doesn not apply to SMS. $$$ per message - the only numbers that matter. Cheers!

What’s even worse about the SMS:es, is that they’re sent on the free (read: unallocated) bandwitdth. So, it doesn’t cost the carrier anything more than keeping track of the message itself. And as we know, keeping harddrives is cheap.

Price gouging, price collusion (all major US wireless providers are now at 20 cents) - sounds like a perfect grandstanding opportunity for a congressperson up for re-election this year. Except that all of them most likely have sweetheart deals courtesy of a very profligate telecommunications lobby. Don’t want to call attention to that, nosirree.

Quick reply to 38 Guest.
Appearently you haven’t done your math.
For a 2G network, a voice call uses 57600 bytes/minute. If the carrier decides to charge, lets say $0.2 per minute, the SMS should cost 1/360:th of that (approx $0.0005). Anything more than that is overchargin the customer. And yes, they are more or less comparable, since voice talk has lots of demands that the sound isn’t interrupted, whilst text messages need to be kept and tracked on some harddrive in the carriers network.

Oh yeah? Well I’ll be sending all my text messages in unicode. There’s no way they’ll still make a profit when I’m sending twice as many bytes! Take that, AT&T!

C’mon, guys, give us a break.

Yes, the rate they charge is ridiculous. And Verizon charges the same rate, which is equally so. But the very fact that they will sell you an unlimited plan for something in the $15-$20 range (granted, only a good idea for heavy users) shows that they aren’t charging per data block.

I happen to agree that the rate they charge is unconscionable. TOTALLY. And I’m not going to go into a long thing about “the price the market will bear”. But . . . no wait, I AM gonna talk about that. People pay it, they charge it. Duh.

What’s REALLY problematic is that when you start receiving spam texts and go to them for help, there is none. Verizon, for example, will let you “vlock” certain addresses. The quotes are a reference to the fact that the blocking doesn’t work reliably. Leaving you with three choices: pay for spam texts, go unlimited, or turn off text capabilities altogether. Oh, and they aren’t exactly forthcoming with the fact that choice #3 is available.

Please treat us, your readers with more respect, and report real stories.

Ya know?

Jeff Yablon
President & CEO
Virtual VIP

@Mark,

No it’s not highway robbery, it’s “iWay” robbery, the 21st century equivelent.

Operators have know this for years - even when GPRS was launched there was talk about IM like services cannibalizing SMS revenue. Now with 3G, Edge etc. the majority of operators have hung on to SMS revenue by enticing customers into attractive sounding bundles. Which does really reduce the average cost per message but not to the value you will get via data.

I think the iPhone is really going to change peoples behavior such that they will not text in the traditional sense.

Do you know if there is any application yet launched which will allow me to send an IM from my phone and then send it to the recipient on their preferred app i.e. IM, Email, SMS, or Text to speech…..

Patrick

Guys, aren’t you forgetting one more thing i.e. the new reduced price is applicable only if you are eligible for upgrade. Now isn’t that a robbery as well? How many ppl who bought iphone last year are applicable for upgrade ?. Last year when they released iphone they never had such pre-condition. Whats the point in reducing the price when half of the them are not going to be eligible for iphone …suckers !

This just in: Cell phone companies in the US overcharge for their services.

Film at 11.

It’s not as bad as it looks. If you read it literally (and I don’t know why nobody doesn’t), .20 cents per text message is pretty cheap. That’s five SMS messages for a penny, 500 for a dollar, and 2500 for $5. Why pay the $5 for 200 messages plan? It’s much cheaper without the plan.

Oh, btw, AT&T?

They suck.

In other, other words, if AT&T charged data downloads at the rate they charge text messages downloading 1MB of data would cost you $20. Not $1,310.72.

Why is this a story?

THAT IS PRECISELY WHY iCHAT IS NOT ON THE IPHONE!
Just a theory, but think about the revenue lost if people use chat instead of SMS.

Lets see a multi-platform BBM killer.

Since when is making money illegal in the US?

I don’t know why people are dismissing the .20 cents per message price. If AT&T advertised that price (as they’ve been doing for hours now), it’s not unreasonable to expect a multi-billion dollar company to honor their advertised price. If AT&T *does* mean .20$ per message, or 20 cents, then I smell a class-action law suit coming.

This error is all the more egregious in light of the “verizon math” problems, as #37 referenced.

Interesting way of putting the cost of SMS. Never in Europe it was done like this. Reality is that SMS are not using IP technology and so comparing it in price/mb is not really a good idea.
SMS succeeded in Europe before mobile IM and mobile internet.
It starts to work in US even though mobile IM and mobile internet has a good footprint…so why? because it is easy, fast, garanteed delivery on time. Hence people are ready to pay more for it !

SMS is dead, and pricing is but one of the nails that will seal its coffin. Others:
* Cheap smart phones will enable mobile email for all. Yeah, data plans are more than unlimited SMS, but people will wind up choosing only one, and
* SMS doesn’t do multipoint or attachments well, and
* you can give out email addresses without worrying about people calling you later (hello, ladies), and
* you can pick up email from multiple devices. SMS is phone only, and
* you can save/file/tag email messages, but not SMS.

RE AT&T: When I signed up with them a few years ago forwarded calls (fwd to home number when home - bad coverage area) cost you minutes against your plan. 3 months into a 1-year contract they changed pricing on me (!) to charge forwarded calls at 25 cents/minute. They tried to charge me a disconnect fee, gave that up, but I could never get a refund for the phone. Then they didn’t return the positive balance on my account for months. The iPhone looks fun, but I’ll wait a couple of years for it to come out on a different carrier.

That is sick

Probably AT&T wants to help the neighbor Rogers with these ridiculous rates. Time to start a site like Ruinediphone.com (previously f@#kyourogers.com).

48 is right. Much cheaper not to get the txt msg plan. But I’m sure the .20 cents is an error. Glad I printed this out and will be bringing it along when I sign up. Because no one likes false advertising.

I think AT&T means 20 cents and not 0.20 cents. On their Messaging FAQs page , they state:

“All AT&T customers with Text Messaging-capable phones are pre-activated to send and receive messages at $0.20 per message with no monthly charge. Or, you can save money and sign up for a Text Messaging package.”

With this pricing plan, iPhone is dead. Bye bye, apple unless you open the phone for competition.

News just to hand, if you buy water in bottles rather than out of the tap, it costs about a thousand times as much!

Residents of Melbourne, Australia would each pay $500,000 each year if they bought all their water in bottles from a shop. (Based on $2 for a 500ml bottle, water consumption in Melbourne 500 Giga litres a year, population of Melbourne approx 4 million).

Outrage, something must be done!

These firms price per consumer perceived value. They have certainly done tons of market research that their analysts interpret to mean that 10 - 20 cents is a reasonable price for the value the consumer receives.

If you sell any product or service you will do better selling value [read: Profit], than cost or saving. People and firms want profits and sales.

People will need to send a message that the present cost structure for text messages is not providing enough value at current prices. The savvy folks that read Tech Crunch are just the people to send the message. You pressure will save us all a load of cash.

That’s my two cents.

46: AT&T has stated that all iPhone owners are eligible to buy at the $199/$299 prices. If you have another AT&T phone and are not yet at the point where your plan is eligible for an upgrade (i.e. because you haven’t reached the point where the subsidy of your existing phone has been paid off), you would not get that pricing.

50: We’ve already seen AOL’s AIM client as one of the debut free apps on the App Store (you can see the icon for it in the iPhone 3G walkthrough video Apple put up today), so it doesn’t look like there will be any limits on IM apps; although it does make one wonder why if Apple is allowing third party IM apps like this, why they don’t go ahead and do iChat too; probably a compromise.

And a bunch of kids in China had figured this out two years back and launched this http://www.zozoc.cn

In Indonesia, a carrier named Esia (myesia.com) created a breaktrough. They charge SMS per character. If you send one character, you pay 1 IDR which equivalent with 0.000109 USD. I think this is the fairest price for consumer.

This is one of those places that really pisses me off about American Cell Phone companies. Japan long ago ditched SMS and just using email for text messages. Generally 6000-12000 character limits. Some of the carriers still have SMS like services but they only work to people on the same carrier. All the rest is just email integrated into the phone.

I’ve ran these numbers before.

If I were to text my entire MP3/Movie collection (230 GIGS) at $0.20 per 160 bytes, it would be:

230 gigs = 235,520 megs = 241,172,480 Kbytes = 246,960,619,520 bytes / 160 bytes per TM = 1,543,503,872 text messages @ $0.20 each = $308,700,774.40 dollars.

63: But this was not the case when they released iphone last year. Anyone could buy at the stated price. This year when the prices are down, why put this condition/clause. i doubt if i am going to buy iphone now

Actually its TWICE as much because they charge both the sender and recipient.

That’s more than the cost of Hubble data transmission.

you know, U.S is not the most developed country in the field of wireless /cell phone. asia has better infrastructure and more attractive service charge. I believe the gap is going to keep increasing. at&t sucks.

Size matters, but the right size here is units of one. In the end the individual is not paying $200K, they are paying $0.20 per text. And if the individual sends more than 75 text messages in a month, the package is the way to average down the price of each text. The author’s argument overlooks per text cost of audit and billing systems. And the author should check the recent sms volumes. Divide texts by the number of mobile subscribers and you’ll see that AT&T picked their time well. Text seems to be a bipolar behavior, you do or you don’t. If you fall into the ‘do’ camp, 75 texts won’t even get you through a week. My 3-person family sent 2625 texts last month — or $0.0111 per message.

Cell companies are like oil companies. They know you need it and want it, and they will charge based on the demand it requires. Sure you have alternatives, but for the cell company, they can capitalize on your need to have it. Just like their 2 year contracts, what if my electric company, gas, cable and other utilities said I had to have 2 year agreements? They get away with because their lobbying dollars allow them to. Remember when it was just 1 year, then competition tighten, so they forced people into 2 years!

your forgetting header information, it would even out to about 200 bytes per

it says .20 cents…not 20 cents…

I don’t use SMS, but don’t they also charge on both ends .You pay separately to send and receive a message. That means they’re really charging $0.40 per message, since the sender pays $0.20 and the receiver pays $0.20. Or am I missing something?

Worse, since I cannot control who sends me messages, I can be forced to pay for message I don’t want. I’ll be first in line for the class action lawsuit that follows.

While I don’t like what carriers do with their pricing of text messaging there are some costs that are being overlooked by the majority of the comments. When a carrier sends a text to another carrier there is a cost involved. There must be joins between the carriers which both must pay for. Internationally this can get quite complex. Here in New Zealand this cost is more clearly reflected where you can buy 2000 texts for $10NZ or half a cent each provided the messages do not pass between carriers ie. no extra cost. Messages to other carriers, in NZ there are 3, are more expensive as each must pay for the function, if at a highly exorbitant rate. Reflected to the customer as 20 cent NZ texts. Internationally texts are 30 cents NZ again reflecting the number of different parties that must handle that message. This is not the internet, there is no Google, services cost money, all of which is reflected by what the customer pays. It is not just data like the internet. It must pass on the inside of the carriers network to other carriers, this is where the extra cost is. I think the carriers could easily bring the cost down, but it is not in their interest to do so.

Had to chime in since there still seems to be a bit of numerical confusion among some folks…not intending to flame anyone.

$0.20 means zero dollars, twenty cents. That’s twenty pennies. Not a fifth of a penny. Were it point-twenty cents per SMS, it would have been written $0.0020.

You all seem to be forgetting that this is also the same rate every other major carrier in America charges.

Here in Australia SMS are 25c each to send. Some carriers have specials where they cost 1c to certain people or during specific periods of the day. It’s all a rip off either way.

Buy a Nokia N95 (or any Symbion Series 3 phone) and install Fring. As long as most everyone else you know has Fring or Email on their phone (and you get an email address when signing up) then it’s essentially free to text as much as you want.

This is idiotic. It doesn’t take into account that fact that SMS uses SS7 transport and not TCP/IP. I’m not a big fan of ATT but if you want to complain start looking at infrastructure costs and write letters to Nortel and Lucent.

While I won’t argue that the rates they charge are fair, one should probably look into HOW SMS works before passing judgement. The Air Interface and channel allocation for SMS is VERY VERY different than the A-Interface for data. Any channels set up for SMS are used for pretty much just that and thats it (this isn’t ENTIRELY true but for the sake of not writing a technical article I won’t go into the details) so any channel set up for SMS CANNOT be used for voice or data traffic whereas certain base stations can be set up to use data channels for either voice or data. The channels used for SMS are control channels (SDCCH or Standalone Dedicated Control Channel) and as their name implies must be dedicated to this task which means that a carrier that has more SMS transmission capability LOSES some voice/data transmission capability. Add to this that not all base stations support the swapping between voice and data channels (meaning you have to dedicate channels to either one or the other) figuring out how to set up your spectrum allocation gets complicated.

Before anyone jumps on me for not knowing what I’m talking about let me say that I work for a small-ish company as a software engineer that make cell phone switching equipment and work with this stuff pretty much every day. Not only that but we recently acquired a company that produces 2G GSM base stations that actually DO support the ability to swap between voice and data one voice/data channels which is nice. This DOES NOT solve the SDCCH issue though as to add more you have to completely reconfigure your base station. unfortunately this is how the GSM protocol works and the way they charge for SMS is at least somewhat related to the protocol itself as it requires the carrier to dedicate (see otherwise give up if not in use for that purpose) resources for SMS in GSM. I don’t, off the top of my head, remember how it works in CDMA as I work more in the GSM side of our software with only occasional forays into the CDMA world (which is fine by me as CDMA is just about dead. At least for what CDMA refers to currently. Technically LTE [4G GSM] is a CDMA style air interface blah blah blah).

Anyway, if anyone would like me to elaborate with a more detailed description I can attempt to do so though one could probably come up with decent descriptions of how things work by a) reading the applicable ITU specs or b) googling GSM SMS and/or SDCCH.

OF COURSE its highway robbery…. OF COURSE its unreasonable…. it is a perfect example of a company completely taking advantage of the uneducated consumer…. the sad part is… even if this became front page news…. most likely nothing would come of it anyway, because for some reason that i will never understand…. the average american today will not fight for what they believe in… wether its for the price of a text message, the fact that we pay extremely high taxes for everything and or even when it comes to the price of gas…. HELLO AMERICA…. IN OTHER COUNTRIES… LIKE FRANCE FOR EXAMPLE… YES FRANCE…. IF ANYTHING EVEN HALF AS BAD HAPPENED IN THEIR COUNTRY… YOU WOULD FIND PEOPLE BANNING TOGETHER TO PROTEST IN THE STREETS….. REMEMBER THIS THE NEXT TIME YOU TEXT A FRIEND OR FILL UP YOUR GAS TANK.

If you don’t like AT&T’s rates, then dont buy the iphone. Apple/AT&T know the mac addicts will bend over and take it if it’s something mac.

I’m with sprint under the sero plan. I pay $30/mo for unlimited data AND text and 500 talk minutes. I haven’t seen anyone yet that can beat that. I can sit on my laptop all day long hooked up to my cell phone and get decent speeds and it costs me $30/mo.

I admit the iphone is very nice, with a nice interface. But that ain’t worth the price in my opinion.

And pretty much all the carriers rip you off for txt messages. Maybe it costs more then 140-160bytes of data. EVen if it’s 1kb of data per SMS, that would still be around $200/meg.

Mike #83 continued….
…… and just as an example as to what im talking about with the majority of americans just ‘grinning and bearing it’ so to speak…. just read #60 above….

I really like AT&T, they are my service provider right now, but something really needs to be done about this.

Wow that is totally insane!

JT
http://www.FireMe.To/udi

Overhead, my sweet *ss. What about the overhead on emails and data voice transmissions? It amazes me how many people there are that willingly make themselves into serfs for the corporations: “Yeah, AT&T — lube me up and ride me hard!”

Actually, the euro sign takes up 2 characters in a message, so not all characters take up 1 byte

In a few years TXT msging will be totally dead and we’ll see the merge of more smartphone compatible texting programs that are quicker/free and more useful.

As stated earlier, AIM is expected to appear in the upcoming App Store. If Blackberry, iPhone, and many other users merge to this medium it’ll speed this up even more. Better yet get facebook to integrate something ‘cool’ and free for all the college graduates and trendsetting will start!

chris
http://www.yoursash.com

1 MB = 1024 KB ATT charges $0.01/KB, so 1 MB will cost $10.24.

It’s a rip-off but AT&T is not alone. Sprint unlimited is 20$ and for 5$ you get 300 messages. I’m sure other providers are screwing people as well.

America is capitalism and that = profit. Truth of the matter is that voice transmission costs for modern networks has been measured in hundredths of a cent(USD)/minute since the late 90s and deployment of commercial digital networks. So SMS isn’t the only prevalent revenue stream for wireless carriers.

It would also be noteworthy to point out that even though there is minimal transmission cost(packet switching vs IP), that there are indirect costs to carriers such as dealing with Verisign and the Metcalf system. Which btw touches all SMS intercarrier traffic in the US. It serves a hub to handoff between networks and tracks delivery and potential error states(ACKs, etc). Knowing Verisign, I’m sure that this service isn’t exactly free.

I’m not justifying the industry price point, but I have worked in the industry since 98 and they all follow suit with one another. If one can get away with it, the others will most certainly follow. Wireless revenues also allowed SBC(now AT&T) to complete the Project Pronto initiative(at $11B) which was the inroad to public broadband access as we know it here in the US.