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Cellphones Space The Almighty Buck

SMS 4x More Expensive Than Data From Hubble 410

paradoxSpirit writes "Physorg has a paper comparing the cost of text messaging versus the cost of getting data from Hubble Space Telescope. From the article: 'The maximum size for a text message is 160 characters, which takes 140 bytes because there are only 7 bits per character in the text messaging system, and we assume the average price for a text message is 5p. There are 1,048,576 bytes in a megabyte, so that's 1 million/140 = 7490 text messages to transmit one megabyte. At 5p each, that's £374.49 [$732.95] per MB — or about 4.4 times more expensive than the 'most pessimistic' estimate for Hubble Space Telescope transmission costs." "Hubble is by no means a cheap mission — but the mobile phone text costs were pretty astronomical!""
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SMS 4x More Expensive Than Data From Hubble

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  • by way2trivial ( 601132 ) on Monday May 12, 2008 @11:06AM (#23378342) Homepage Journal
    nilbog writes
    "What's the actual cost of sending SMS messages? This article does the math and concludes that, for example, sending an amount of data that would cost $1 from your ISP would cost over $61 million if you were to send it over SMS. Why has the cost of bandwidth, infrastructure, and technology in general plummeted while the price of SMS messages have risen so egregiously? How can carriers continue to justify the high cost of their apparent super-premium data transmission?"

    http://tech.slashdot.org/article.pl?sid=08/01/29/0244208&from=rss [slashdot.org]
  • Double dipping (Score:5, Informative)

    by Anonymous Coward on Monday May 12, 2008 @11:08AM (#23378376)
    And don't forget that both the sender *and* the recipient pay for a text message for every one sent.

    Sprint's charging $0.20 each for these now-a-day (unless you have another plan of some sort). It's just the latest ripoff in the mobile phone industry.

  • by awjr ( 1248008 ) on Monday May 12, 2008 @11:09AM (#23378394)
    If you look into the dim and distant past SMS was a free service that came with your phone 'package'. Then they realised they could actually make money from it.

    Ironically the price of an SMS is dropping and it actually costs somebody who 'bulk' buys 10000 messages around about 1.5p .

    My concern is that it is getting so cheap, that I've already started receiving spam SMS.

    As an aside, some companies now provide a SIM card hosting service. So if you can get the right package from an Operator (e.g. unlimited SMS messages) there is nothing to stop you spamming the world.

    Thankfully 'clicking' on any links is not so simple and most people realise clicking actually costs them money.
  • by El_Muerte_TDS ( 592157 ) on Monday May 12, 2008 @11:09AM (#23378400) Homepage
    In the Netherlands 0.25 euro (16p or $0.38) per message is quite common. For that price I can call 1.67 minutes.

    But that doesn't matter for me. I don't use text messages for the simple reason that I don't think it's worth the price.
  • by EdIII ( 1114411 ) * on Monday May 12, 2008 @11:11AM (#23378422)

    and we assume the average price for a text message is 5p
    That is an assumption and most likely pretty conservative. There are plenty of SMS text messages sent/received by complete idiots that spend 99c per message. I am not attempting to troll here either. Those people are COMPLETE IDIOTS to spend that kind of money on a simple text message. I am always reminded of the saying, "A fool and his money are soon parted".

    So when you factor in these novelty SMS messages, the ratio becomes much worse.

    I have never seen any hard data on the actual costs of sending a SMS message across GSM/CDMA cell towers, but I expect that the profit margins on a SMS message make Monster look positively razor thin with it's own margins.

    The reason why anyone with a brain (even a damaged/inebriated/mutated one) can see how ridiculous the price points on SMS is pretty simple.

    Take a mid-range T-Mobile calling plan. Say the individual 1000 minutes for 49.99$. That is 4.9c per MINUTE of a telephone conversation.

    Until quite recently, a SMS text message plan did not have unlimited messages. They do have this now for 14.99$ at T-Mobile. The plan right below that? 9.99$ a month for 1000 messages. Yep, that is 1c per text message. I had always remembered plans that were 250 messages for 4.99$ at various places, which is 1.9c per text message.

    So does anyone really beleive that a SMS text message can cost 20-25% as much as a minute of a cellphone call?

    I certainly didn't think so. Raise your hands if you think that is right. Anyone? Anyone at all?

    SMS was ALWAYS their little cash machine. Most people never paid attention to it, or considered the real costs involved and I would bet 4-5 digit profit margins at a minimum for the past decade.
  • by The_Quinn ( 748261 ) on Monday May 12, 2008 @11:12AM (#23378436) Homepage
    Sprint, for one, offers unlimited text, voice, data, etc. for less than $100 a month - so I don't see the "squeeze" you are referring to.
  • Hmm (Score:4, Informative)

    by Anonymous Coward on Monday May 12, 2008 @11:13AM (#23378462)
    Actually, the standard rate for text messaging in the UK is 10p, not 5p
  • Re:Math is HARD (Score:5, Informative)

    by Crazy Man on Fire ( 153457 ) on Monday May 12, 2008 @11:16AM (#23378506) Homepage
    160 characters * (7 bits/character) * (1 byte/8 bits) = 140 bytes
  • Re:Math is HARD (Score:5, Informative)

    by Hyppy ( 74366 ) on Monday May 12, 2008 @11:18AM (#23378534)
    TFA is talking about the transfer of data, not how many little bits are actually involved in the transaction. Headers and transmission overhead are not data. If you downloaded a CD ISO, you would not say that you downloaded 946MB and include "overhead" in your figure. Did you include your name and the class number in the word count for your papers in college?
  • Japan text messaging (Score:2, Informative)

    by Khisanth Magus ( 1090101 ) on Monday May 12, 2008 @11:22AM (#23378592)
    Japanese cell phone plans are universally calculated by amount of data transmitted and not minutes/# of text messages. It is actually significantly more economical to text message someone on a Japanese cell phone network than it is to call them, as the calls eat up your data allotment very quickly. As a result you will very rarely see people talking on cell phones over there, instead they just text. Of course, as a result they can type of text messages at an astonishing rate.
  • Re:Double dipping (Score:5, Informative)

    by stevey ( 64018 ) on Monday May 12, 2008 @11:27AM (#23378664) Homepage

    That's primarily an issue with American carriers.

    In the UK, where I am, & Europe, we pay to send messages, and make phone calls, but to receive either is free.

  • by Hyppy ( 74366 ) on Monday May 12, 2008 @11:40AM (#23378864)
    The profit margin on many independent vendors' food at sporting events is not as high as you think. You'd better believe that they have to pay through the nose to be able to hawk their concessions. Either way, it's not a 4-digit profit margin by ANY stretch of the imagination.
  • Re:Other costs? (Score:5, Informative)

    by MozeeToby ( 1163751 ) on Monday May 12, 2008 @11:50AM (#23379022)
    I'm not sure the exact costs that the carriers incure when people send a text message but I do remember this:

    After the freeway collapse in Mineapollis last year, the cell companies told people to text rather than call in large emergencies because it uses significantly less resources.
  • Re:This just in... (Score:3, Informative)

    by tepples ( 727027 ) <tepples@gmail.BOHRcom minus physicist> on Monday May 12, 2008 @12:16PM (#23379426) Homepage Journal

    HP sells their inkjet ink for nearly 8,000 USD per gallon.
    That's because each ink tank comes with a print head that hasn't yet been clogged with ink.
  • by rfunches ( 800928 ) <thefunch&gmail,com> on Monday May 12, 2008 @12:42PM (#23379744) Homepage

    I'm sure they have a way of putting a block on a particular service -- I've been with Cingular (before the AT&T merge) and Sprint and both of them can block SMS, you just have to call and push the CSR to do it. And if they tell you they can't, ask for next-tier support. If they tell you no, threaten to take the matter up with your state's AG and the FCC. That usually gets a quick response. (If Sprint can do it, and their customer service is quite possibly the worst I've ever encountered, then T-Mobile can do it.)

  • Re:Double dipping (Score:3, Informative)

    by Lisandro ( 799651 ) on Monday May 12, 2008 @12:49PM (#23379866)
    Only in the US. In the UK (and the rest of Europe, AFAIK) the telcos don't charge you for receiving textsand even the idea of them doing so is considered absurd.

    Ditto for most Lain American countries. SMS aren't exactly cheap down here, but receiving is always free of charge.
  • Re:Math is HARD (Score:4, Informative)

    by Sique ( 173459 ) on Monday May 12, 2008 @12:51PM (#23379902) Homepage
    Not exactly. We are talking purely payload, and the payload of an SMS is 1120 bit. We don't care about ethernet frames occuring while sending the SMS within the provider network, we don't care about traffic due to the database requests to find the actual location of the target mobile phone, we just want to know: Here we have a certain amount of information, expressed in a certain amount of bits. How much would it cost to transfer it from point A to point B via system S?
  • by KingJ ( 992358 ) on Monday May 12, 2008 @12:52PM (#23379912) Homepage
    It varies, with most networks it's around 10p, but some do offer 'bundles' which work out at 5p per text. The vast majority though pay 10p I suspect. Complete ripoff, I try not to text, especially if I know it's going to be one of those 'conversation' texts.

    At least we don't pay for receiving texts/calls. That idea just seems absurd to me.
  • Re:Math is HARD (Score:4, Informative)

    by bishiraver ( 707931 ) on Monday May 12, 2008 @12:55PM (#23379968) Homepage
    They use the call notification signal (the signal that tells your cellphone there's an incoming call and who it's from) to transmit the SMS in pretty direct binary. There's a start and stop code so that your phone doesn't actually ring like it's a regular phonecall.
  • You're correct. I was just in Tokyo a couple of weeks ago. In most places - restaurants, buses, trains, etc. - it's expressly forbidden to talk on mobile phones. But look around and you see nearly everyone's thumbs going a million miles per hour.
  • by Anonymous Coward on Monday May 12, 2008 @12:58PM (#23380018)
    I believe they actually make use of email primarily over SMS. Since they already have the infrastructure in place for carrying all that standard data.

    And you'd be right that the driving factor is rudeness/etc. On a train or subway there, you'd almost never see anyone talking over their cellphone and if they were, they'd be getting a few odd looks from other passengers. Unlike here say, where people talk on them no matter where they are, often a little too loudly.
  • Re:Double dipping (Score:4, Informative)

    by jc42 ( 318812 ) on Monday May 12, 2008 @01:34PM (#23380610) Homepage Journal
    (I wonder if anyone's ever considered investigating these companies for racketeering - wouldn't surprise me even remotely if they were colluding on these things)

    Nah; they probably haven't been "colluding" in any legal sense. They can probably show in court that they haven't gotten together to arrange prices.

    The term you're looking for is "gentlemen's agreement", which has a long history in the business world, and is the standard way of getting around any such government regulation. Now with the Internet, it's easier than ever for companies to align policies and prices without doing any direct communication. Each company just keeps track of its competitors' policies and prices, and makes sure that their own are roughly the same. They're also careful to maintain slight variations, as "proof" that there's no collusion.

    This can be broken in two ways. One is for a company to suddenly introduce a much better deal with customers. This doesn't happen often, because there are usually strong barriers to entry. This means that the change would have to be done by one of the existing companies, and their management has the sense to not do that. This has happened in the past, when a large outside company with sufficient funds was able to break into a market. A major example recently was the entry of Japanese auto companies into the American market back in the 1960s and 1970s.

    The other way to break a gentlemen's agreement is via government action. We had a major telecom example of this in the US in the 1970s, when the government invalidated the companies' contract terms forbidding "foreign attachments". Suddenly things like modems and phones with new features became possible, and we had an explosion of new products that the phone companies had managed to block for the previous century.

    But it's rather rare for government regulators to make such enabling changes. This is the current situation with cell phones, where there appears to be regulation and competition, but the regulative agencies are pretty much ruled by the companies. So gentlemen's agreements are the way things are organized, and the companies can all say "Sign our contract or go without entirely". They know that their competitors' contracts differ only trivially, the regulators are mostly there to prevent entry of new competitors, and there's no way for mere customers to do anything about it.
  • by camg188 ( 932324 ) on Monday May 12, 2008 @01:36PM (#23380656)
    Much more data is sent with an SMS that just the text of the message. How do you think you get the caller id of who sent the message? To see how much data is actually sent check out the format of a "call detail record". [cisco.com] Most data is not compressed, but rather sent as a comma separated list. You would be amazed at how much data is actually tranfered for any type of wireless communication. First the message from the sending device is sent to the nearest cell tower, which contacts a database to see which carrier you subscribe to. (Your phone does this periodically also, so your carrier knows which cell tower service area you are in so they know where to send your calls). The number you are calling is looked up in a database so they know which cell tower to broadcast your message from. Plus your IMEI,ESN, calling number, called number,originating and terminating cell tower information, originating and terminating switch and trunk data are transmitted with each message. Copies of each record are reformatted and sent to the carrier for retention, copies are sent to the billing company and the company that maintains the carrier's customer service web site, etc.
    My point is that much more data gets transferred for each sms than the 160 characters of the text. Considering all the data transfers required for the whole process, the text of the message is actually a very low percentage total data processed.
  • Re:Math is HARD (Score:4, Informative)

    by BarryJacobsen ( 526926 ) on Monday May 12, 2008 @05:03PM (#23383870) Homepage
    Each of my little sisters (one is 12 other is 14) sends over 7,000 messages a month, minimum. That's 233 per day from each. They live in a small town of roughly 1,200 people - there's only 30 kids in their class. I can only imagine how large that number would be if they went to a larger school. Unlimited text messaging keeps my parents out of the poor house.
  • by LilGuy ( 150110 ) on Monday May 12, 2008 @05:20PM (#23384076)
    I pay about $32.50 every 2 months for a prepaid phone. I get texting at about $.50 a message and voice calls are $.10 a minute with a 1 minute minimum. That $32.50 gets me 400 minutes which roll over to the next 2 months if I don't use them.

    I really can't fathom how people can spend $100 a month for a phone service. Surfing the net is what I do at home or at school... not while I'm driving 90 down the interstate.
  • Overhead (Score:5, Informative)

    by iamlucky13 ( 795185 ) on Monday May 12, 2008 @05:53PM (#23384546)
    In-flight calls or data are a poor example. You're talking about putting in equipment that costs more than typical network equipment because of requirements like low EMI, light weight, minimal maintenance, ground stations to handle the data, programming to manage handoffs at 500+ mph, and the process of getting FAA approval when you integrate it with a jillion other systems on a commercial airliner. It genuinely is expensive. Even at $10/hour that Boeing was charging for their Connexion internet service, they lost huge amounts of money on it (I think partially because they over-engineered the system, but I'm not very familiar with the details).

    The cost of using it are very low, but the costs to initially add the feature are very high. Then you add in the fact that usage rates are typically low (only a handful of passengers buy it, only "full-service" airlines install the equipment), it can be hard to make it pay for itself.

    Of course, they do add a high margin on top of their projected costs because they can without affecting the demand much, but the fixed costs still dominate (at the moment...data services will be much better integrated in the coming generation of airliners, and we may be moving towards allowing cell phones in flight, too).

    SMS is the opposite. They aren't seeing low usage on new, expensive infrastructure. They're seeing high usage on existing, paid-for infrastructure.

    The SMS scheme really isn't a very good one. SMS messages get multiplexed into the control channels on the mobile phone network, and it's really a 2nd generation technology. The size of the control channels is fundamentally limited, but each slot is big enough for a text message. So the providers squeeze the SMS into it because it fits and it doesn't require re-engineering their protocols to fit it in the voice channels. This is also why SMS is limited to so few characters: That's what fits in a time-division on the control channel.

    Unfortunately, it proved to be a popular service. The limited extra space fills up quickly. In fact, it's theoretically possible to launch a relatively wide-area DDoS attack [smsanalysis.org] by sending only a couple hundred messages per second from zombie clients. To get the best return on their existing capacity, providers raise the price to discourage excessive use.

    The puzzling thing in my opinion is that it's taking so long for this service to shift from being side-banded in the 2G scheme to being normal data packets on 3G networks. As that happens, the capacity for text explodes (text is way more compact than voice, pictures, video and other planned 3G content) and the providers can leverage the genuinely low cost of text to undersell their competitor's plans. A pricewar ensues and the consumers win.

    But it hasn't happened yet. My best guess is because the companies realize that the first one to make a substantial move in this direction will only enjoy success for a short time before the others all catch up. Then the competitive advantage is gone and profits have dropped close to zero.

    No, I haven't sourced much of this. It's mostly conclusions from discussions with friends who work in the mobile industry. Feel free to correct the parts I got wrong.
  • by Kanasta ( 70274 ) on Monday May 12, 2008 @10:35PM (#23387078)
    in Japan nobody uses SMS. Phones send/rec proper emails with a proper email address. Costs start from 0.9yen, going up to 2-3yen if you send 5000 character mails.

Were there fewer fools, knaves would starve. - Anonymous