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Text Messaging: How Cellular Carriers Rip You Off

Posted by Mario Stylianou Categories: Technology

People are constantly annoyed at me for not being able to receive text messages.

Those who are not technology savvy assume it’s some limitation of a “cheap android” phone and ask if they got an iPhone would that solve my problem.

(Ahem, the iPhone 3GS couldn’t even send MMS for three months after its release date. That’s the third iPhone to be released, not to be confused with the fifth iPhone released a week ago. My second phone from 2002, the rotary Nokia 3650, had this feature.) And those in the other camp, who understand what SMS is, just think I’m cheap.

Nokia 3650

Bluetooth, infrared, and a camera phone. Not bad for 2002.

Since my Blackberry Bold (and subsequently Blackberry Bold 2), my first smartphones with data plans, I’ve been using text messaging much less and using email to communicate with people a lot more. Data (email/instant messenger) were the wave of the future and I knew it then … but with any still cutting edge and not-yet-mainstream technology, I had to be backwards compatible. Thus, when I did have to text, I’d use SMS gateways to send an email that would arrive as a text message for other people. Hence, everyone was happy. I’d stay below my text messaging quota and I could get away with the cheapest texting plan.

With my current Android phone, I cut the cord with texting completely because it really is an unnecessary expense and, in terms of carrier costs, a total ripoff. The reason why you’re limited to 160 characters in a text message isn’t because some forward thinking executive thought he had a million dollar pre-Twitter idea. It’s significantly more business rational. It’s because with 160 characters, you can encode a message within packets of data that go between your phone and your carriers cell phone tower anyway. These packets are sent back and forth very frequently and they are often not completely filled to the brim with data. (Imagine it’s like a box that still has empty space inside.) Thus, you can encapsulate a short message in the less-than-full packets that are already being sent from your phone.

In other words, when you send a text message, you don’t cost your cell phone carrier a dime. You are not causing any additional strain on the network. In fact, your message is part of the operation of the network that happens anyway as you simply take advantage of already unused system resources. For example, your voicemail notifications are really special text messages that your carrier sends to your phone that get processed by your phone instead of landing in an inbox. Worst case scenario, when texting between carriers, they charge each either some negligible per message cost.

 Texting

Texting

People think that texts are more reliable than email. They’re not. During normal operation, 1-5% of text messages are lost entirely. Others are delivered significantly delayed. Text messages also receive lower priority than voice traffic, so they’re use as an emergency notification is rather problematic. During the DC quake, I had a perfect 4G data connection; I was streaming video of the news, telling friends and family I was alright via GMail and Google Talk, looking up information about the quake, and emailing my manager’s father (co-owner of the company) because … we couldn’t get a voice call out to him. That’s right: no voice calls, no text messages, but data was still chugging along.

While most cellular subscribers would never intentionally abandon their beloved text messaging, influential companies are doing it for them. BlackBerry Messenger was mostly a corporate thing but as RIM started aiming at consumers instead of just business users for its phones, BBM has been taking away a slice of the texting pie and moving it to data. With the new iOS5 on iPhones, iMessage will be doing the same thing for all iPhone users. This means that all BlackBerry and iPhone users, who will make up 20% of all cellular subscribers by the end of the year, can very, very easily opt out of using text messaging.

Considering that cell phone carriers charge us $20 or more for a service that costs them next to nothing, it’s a killer profit for their bottom line. However, should people rationalize this the same way I do — or start using alternative apps like BBM or iMessage — then carriers will have significantly less revenue from a service that has one of their highest profit margins. What remains to be seen is how carriers will compensate for this loss of revenue that they’ve taken for granted so many years. Will they bite the bullet and swallow the cost? Or will they pass along additional charges to consumers?

Mario Stylianou


 

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