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234 Comments
- popsumer, on 10/12/2007, -5/+173UPDATE: Verizon txt msg rates are now 15 cents. So it's actually 7314% markup.
- KAIZENfocus, on 10/12/2007, -8/+157Verizon is just another lame corporation that attempts to bleed their customers dry....
I understand that they need to make a profit, but at time it seems quite steep.
Then again, I'm the idiot that signed a two year contract.......I guess I'm a sucker for suffering - jcapogna, on 10/12/2007, -8/+147Why will nobody think of the text message elves? They work so hard and get paid so little.
- mr1337, on 10/12/2007, -6/+130Answer: Because they can.
- KibibyteBrain, on 10/12/2007, -6/+102Mark up text messages 7000%
???
Profit!
Hmm. Actually, we can just leave out the "???" this time! - senorcool, on 10/12/2007, -1/+84Yeah, what are all those little teeny boppers gonna do? NOT text? Yeah right.
- allaboutdatiki, on 10/12/2007, -3/+80Why? Because they can. :(
- mrwiggles123, on 10/12/2007, -4/+61Because idiots like you pay the %4000 increase
- lordthor, on 10/12/2007, -2/+48as for your two year contract, switch to paperless billing and submit a change of address to an area they don't provide service. they'll be required by law to terminate your contract without penalizing you as they are no longer able to provide you service :)
- razrielle, on 10/12/2007, -10/+56@jdwtc
Is that in dollars or cents? - EtherGnat, on 10/12/2007, -3/+48"Free market economy... if you WILL pay $X for a service and that is making the company a lot of money, then they will charge you $X."
Except it's not really a free market. Lack of network neutrality, vendor lock in, and price fixing between the providers destroys anything resembling competition. - Derrelicte, on 10/12/2007, -1/+39@ TheYellowMole
I think you missed the reference to the Verizon math ordeal. - Loie, on 10/22/2007, -2/+35i remember when they called it "email" and it was free.
- JDWTC, on 10/12/2007, -6/+35the phone companies have an upfront cost of infrastructure.
after that, it's pure pure profit. minus 0.00001% to pay the staff bills
you think this is new? - BenHanby, on 10/12/2007, -0/+28This 7314% markup is why I won't use text messages.
It's not that I don't find them convenient, or that I can't afford a few extra dollars on my phone bill. It's because I strongly resent getting ripped off. It's a matter of principle.
I will spend time and pay money to keep my hard-earned dollars out of the hands of greedy bastards. So to those free market purists who say "If it's not worth 15 cents to you then don't use it!", I say it's more complicated than that. - Konrad9, on 10/12/2007, -3/+28Yeah, let's single out Verizon, none of the other companies charge outrageous prices for text messaging.
- laplacian, on 10/12/2007, -1/+20from TFA: "Bytes are bytes. What makes a text-message byte so much more valuable than a straightup data byte?"
This is an econ 101 question that can be figured out by anyone who thinks about the problem for more than 30 secs.
The answer is: because that's what customers are willing to pay for it. there is a convenience factor in being able to message someone else's phone directly that text-messaging is specifically set up to provide. If you think it's too expensive then don't buy it. - pcdescha, on 10/12/2007, -4/+20Same reason bottled water costs $3.00 at the vending machines in lines at amusement parks... because people will pay it.
- DolphinGL, on 10/12/2007, -5/+21The indignation expressed by everyone at this is a bit much.
No one is forcing you to use SMS.
Cell phone companies charge that much because they're a business and they're out to make money. This is a capitalist society and no company should be painted as sinister for successfully making an honest dollar. They set the price, the public agrees to pay it.....that's it, markup percentage should not matter. If I or anyone here owned a business they would mark their products up 10000% if they knew people would pay it. It only makes sense. The consumer controls the market. Blame yourselves if you think you're paying too much. - thcobbs, on 10/12/2007, -8/+20Actually, it's more like this:
"Why? Because customers will pay it." Free market economy... if you WILL pay $X for a service and that is making the company a lot of money, then they will charge you $X.
I don't see how this is a bad thing.... You don't have to text message and you can turn it off. - fatdog789, on 10/12/2007, -8/+20It's the free market: if you don't think the service is worth $0.15, then DON'T USE IT.
- elk1, on 10/12/2007, -3/+14because you touch yourself at night
- Cutkomp, on 10/12/2007, -2/+13Fatdog....
Isn't the telecom industy one of the least free market of industries? Since its inception it has been plagued by corruption, on/off again monopolization and excessive regulation. I agree with your "If you don't like it don't buy it" philosophy, it's precisely the reason I don't have a cell phone, but the telecom industry is entirely screwed up and far from a natural free market. - martin308, on 10/30/2007, -2/+12What, so you have to pay to receive txt messages? That's pretty ridiculous. What happens if you have no money on your phone and you get a txt?
- drlha, on 10/12/2007, -1/+9No, people will spend $3 on water at an amusement park, because in that environment the amusement park has a monopoly on water sales.
- garyh84, on 10/12/2007, -0/+8What?
- Cutkomp, on 10/12/2007, -2/+10Telecommunications companies have been screwing consumers for decades. I think their deviousness runs deeper than simply screwing customers, but we'll save that theory for another day.
- dacheetah, on 10/12/2007, -1/+9That sucks hard... When it comes to most things Australia gets ripped off, but we pay about 22c (AU) to send a message, and nothing to recieve one.
That's less than US$0.18 per message, rather than splitting the US$0.30 between two of you. We also have providers who have deals for people who like to send text messages, and on such plans (even pre-paid plans) you can pay as little as 1c (AU) per message. (Then there are the plans with 500 free TXT messages per month) - inactive, on 10/12/2007, -0/+7Getting charged for receiving a text message is pretty ***** in my book. You think the telco should be able to recoup the 4000% profit from the person who sent the damn thing
- jayhawk, on 10/12/2007, -0/+7dork.
- ne0n, on 10/12/2007, -0/+7The cell phone companies don't even tell you when they are upping the cost of a text message until _AFTER_ you have sent them all. You get the bill and find out it was $0.15 instead of $0.10. That right there could make the difference in your parents' minds in getting you a texting plan or not. =P
- Osjpr, on 10/12/2007, -1/+8"Verizon is just another lame corporation that attempts to bleed their customers dry...."
Attempts? - nonsapiens, on 10/12/2007, -1/+7I'm in South Africa (one of the most advanced cellular-enabled countries, certainly more so than the States.)
I pay about 70c for a text message (that's about 9 American cents), and receiving texts is free, across all networks, at all times. I get given 20 text messages free at the beginning of the month, thereafter I pay. Additionally, my GPRS or 3G data is billed at about 50c (4.5 American cents) per megabyte. Checking my voicemail is free. My phone is not network-locked.
I can't help but think that my American brethren are being fleeced... - KibibyteBrain, on 10/12/2007, -0/+6@hdtvdust Aw, how did you know I was some idiot bum on the street with no skills! Yeah, my bad on not publishing a peer reviewed paper with full IEEE standard sources for my stupid little reply post on Digg. I promise it won't happen again, sir.
- dubiousmike, on 10/12/2007, -0/+6It is about charging what the market will bear. They'd charge $5 per SMS if less people would pay and it added up to more than they were making right now.
- drlog, on 10/12/2007, -0/+6Its the same in every country. Realistically, they should be under 1c each! But they wont make lots of money and people are willing to pay 15-25c for a text message.
- inactive, on 10/12/2007, -0/+5The way it was explained to me by a verizion techie is that the massive amount of SMS users pretty much subsidize the data plans that require costly higher speeds and more capacity.
- gorkish, on 10/12/2007, -2/+7I am in no way trying to defend 10 cent text messages (now 15 cents I understand) however I would like the consumerist to be a little more thorough in their reporting. It seems that recently they have been publishing more unsubstantiated gripe/rant pieces without any verification or good followup. A shame because in this case they are wrong. SMS bytes are not the same as Data Plan bytes.
Equating SMS bytes to GSM/EDGE/EVDO/etc data transfer is unjustified. Considering the amount of transmit time and amount of spectrum it takes to send a byte via SMS vs a byte via EVDO a 5000% markup would actually be rather low. You see, the two technologies use different data transfer methods which are actually not equivalent. SMS is transmitted using a slower and less spectrum efficient protocol than cellular data traffic and it uses transport channels that are of substantially lower capacity than the shared channels used for data transport. Moreover, providers do incur fees (although almost insignificant compared to 10c) to route these messages onto other providers' networks or towers which they have to cover somehow.
What cell providers really need to start doing is automatically bumping people on (or off) of plans automatically as they use (or stop using) such services.. IE if you send 95 text messages one month they bill you for the 100-message plan rate. If you use 693 minutes they bill you at the 750 minute plan rate -- just publish the next month's tier pricing in advance and assign your customers to the tiers based on their actual usage. It's an extremely fair business model, and unfortunately, because of that it's probably not one any telco is going to be willing to adopt. - roosterjm2k2, on 10/12/2007, -1/+6Phone companies in general rip people off.
Look at regular phone companies...last year the average long distance call cost 0.008cents per minute, most companies charge around 5cents a minute (without a pre-existing long distance plan) thats what... 625 times the cost?
Its called demand. As long as customers are willing to pay for a service, the price will not drop. Then again, if you text much at all, get an unlimited text plan added to your account.
Or, and I know this is a radical, but you could use your phone, umm, like a phone. Just throwing that out there. - lilmoonee, on 10/12/2007, -1/+5simple: because they can.
- inactive, on 10/12/2007, -1/+5"Why Are Text Messages Marked Up 4876%?"
because they can.
because they are a cartel. - MScrip, on 10/12/2007, -0/+4Also... how much data is in a voice call? All cell phones are digital... so your voice is converted to bits and bytes, sent to another phone, and decoded on the other end. It's all data!
- Dempf, on 10/12/2007, -0/+4Pay to receive text? That means I could use one of those free websites that lets you send text messages (I think google offers this) to completely rape someone in the ass. I could even automate it, so that they get charged $.15 every second of every day.
- inactive, on 10/12/2007, -1/+5It's sad but timpin1 is likely as pasty white as I am. You have no excuse to use that language, your ancestors weren't slaves.
- evi1, on 10/12/2007, -0/+4No, we buried you because you are a dumbass.
- KibibyteBrain, on 10/12/2007, -0/+4@hdtvdust Your understanding of basic economics is horrible. Demand increases alone do not raise prices. Demand met with other conditions is the cause. Usually the condition that causes price increases with Demand is limited supply, but other factors can come into play like nonlinear support costs. However, in this case support costs are mainly based on geographic distribution more than loading.(load cost in telecommunications are nonlinear but decreasing asymptotic) So if anything it would be beneficial for the provider to lower prices in face of increased demand as their costs go down further on a per customer basis much faster than they could possibly lower the price, assuming they are smart in marketing it in a fashion that would not increase their geographic distribution demands.
Oh wait, I shouldn't have wasted my time. Forgot you are just an idiot troll. - Namco, on 10/12/2007, -1/+5Keep your conversations with your butt buddy to yourself.
- ptrcd003, on 10/12/2007, -0/+4@spoid
I pay $10 for 2500 messages..weird eh - SaintDogbert, on 10/12/2007, -7/+10Because cellular providers are greedy and consider their customers to be nuisances.
Also this article has old numbers, Verizon started charging 15 cents for both sent and received SMS messages at the beginning of March. - bposton, on 10/12/2007, -0/+3Because people are willing to pay that much you socialist pig.
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