AT&T, Verizon deny SMS price fixing
updated 10:35 am EDT, Wed June 17, 2009
ATT Verizon Deny Fixing
AT&T and Verizon late yesterday denied claims that they and other carriers are fixing SMS prices. Testifying in front of a US Senate subcommittee, the two companies insist that the sudden burst of per-message rate increases in the space of several months was conducted independently and that it doesn't reflect the actual price customers pay per message, as most customers have message bundles. AT&T general counsel Wayne Watts argues that the investigation started by Senator Herb Kohl is focusing too heavily on a single business model.
"The faulty notion that prices for text messaging have risen derives from an unduly narrow interest in the trend of a single pricing option for text messaging services, the pay-per-use option, when the vast majority of AT&T's customers do not choose that option," he claims.
Opponents, however, believe that the per-message rate is often kept deliberately high to steer customers towards the more lucrative bundles, which force customers to pay for a number of messages they may not necessarily use. AT&T typically asks $5 per month for 200 messages, or about 2.5 cents per message. On a 20 cent per-message plan, this only allows 25 messages and therefore steers virtually all customers interested in at least casual messaging towards the more expensive plan to avoid being charged more.
The actual price of a message is potentially even less, as each message uses 160 or fewer characters and has very little overhead even on the oldest networks still in use by major carriers.
Maybe not, but...
06/17, 12:07pm reply
They may not have risen in price but the fact that we are being charged $0.20 per message for overage or for those who don't sign up for a text "plan", is obscene.
Text messages cost cell phone companies (ALL of them) absolutely nothing, yet they charge high per message rates AND force to you to stick to 160 characters. Why do they force you to stick to 160 characters per message? Because, using more than that would cost the cell phone companies money. At 160 characters or less, it costs them nothing. Zero. Not a penny.
Take a look at this New York Times article, they explain it in detail: http://www.nytimes.com/2008/12/28/business/28digi.html
MacinTalk
Fresh-Faced Recruit
Joined: Jul 2006
Recently burned...
06/17, 12:16pm reply
I was recently in the US and have a Verizon plan courtesy of the SO's parents. I sent a few text messages, knowing that I'd be paying rather a lot for them. But I also received a bunch of messages from European friends based in the US and ended up paying $16 in 1 month for the privilege.
So let's be clear here: I had to pay well over the odds for something over which I had no control whatsoever. Whatever country you're in that's complete BS and worked out to something like $0.30/message. Considering that the delivery cost is under $0.005 (I have consulted to telcos here in Europe) that's tantamount to extortion.
I hope that Verizon gets some more hard questions over this.
jreades
Fresh-Faced Recruit
Joined: Feb 1999
Extortion!
06/18, 03:50pm reply
They charge up to 6000% more than the actual cost of sending a text just to force people into buying texting plans. They know most people will buy a bigger plan than they think they will use (otherwise you end up right back where you started, paying 20c per text on overages) and therefor more money in their pockets. This time for something you didn't use.
I refuse to bow to this kind of manipulation and instead opted for a StraightTalk prepaid plan from Tracfone, where texting costs 1c each and talk is 2c a minute. Much better!
GarthT
Fresh-Faced Recruit
Joined: Jun 2009