Text Messaging is a Ripoff
December 29, 2008The mobile phone carriers are some of the worst offenders of monopoly power. Case-in-point is the pricing of the text messaging system. A recent New York Times article explores it in some detail - but I don't think they go quite far enough. Consider that the average per-message cost (assuming you don't have a special deal) is $0.20. If you have a special plan (which according to the article run $10-15) you can cut that price to about $0.01 per message. That may sound really cheap - but let's do a little math:
Text messages are limited to 160 characters. Assuming a standard ASCII encoding, it takes only 1 byte to store each character - so a message is approximately 160 bytes in length. At the prices quoted above:
- $0.20 per message / 160 bytes per message = $0.00125 per byte = $1.28 per kilobyte = $1,310 per megabyte = $1,342,177 per gigabyte
- $0.01 per message / 160 bytes per message = $0.0000625 per byte = $0.06 per kilobyte = $65 per megabyte = $67,109 per gigabyte
The only reason the phone companies manage to get away with this outright robbery is because few people actually take the time to figure out how exorbitant these fees really are.