Now let’s assume that you are a true texting fiend: using the same $10/month unlimited plan, let’s assume you manage to send one text message of maximum size every second of every day for 31 days - that’s 2,678,400 messages in a month. Applying the same math as above, you’re still paying $25 per Gigabyte - over 100 times what Comcast is charging.

Finally, consider again that we’re using Comcast - a pretty notorious monopolist with excessive rates - as our baseline comparison.

My point in presenting this article was not to “poke at companies making too much money” - nor to insinuate that the cell phone providers are somehow required to provide data service at rock-bottom prices, despite their infrastructure and other fixed costs. Rather, my intention was to illuminate the fact that this particular market is effectively a monopoly, or at the very least an oligopoly. The simple fact that the companies can charge such outrageous rates is evidence of that. Given the barriers to entry in this field (the not-insubstantial fixed costs that Tristan alludes to), the likelihood of breaking the monopoly through market forces is unlikely at best. The only thing that stands a reasonable chance is sheer customer outrage or governmental intrusion. And while in most cases, I think the government should keep its grubby nose out of the market, there are some definite exceptions.

However, you are really over simplifying the costs tremendously judging it on a theoretical person who manages to maximize their text message use (without going one message over nor one message under) and figuring the cost from there. That almost never happens. If they go over they pay a higher per-message rate, and if they go under, their cost per message goes up. Those that sign up for a plan that do *not* use all their minutes still get charged, and that extra money subsidizes the actual messages sent.

There are a lot of hardware and maintenance costs, and those are covered by the subscriber fees. Those are not insignificant costs, trust me on that.

Granted, the US is pretty much the only place where you get subscription plans — the telecom providers love that since under-utilization of a subscription is money in their pocket. Everywhere else in the world is pretty much pay-as-you-go. Much more reasonable for many reasons. Not the least of which is that if a service is not priced right for the consumer, they won’t use it and the income drops.

Thus the carriers have an economic incentive to keep the price low so that more people will use it. That can result in less-than-stellar service sometimes, but they have to cut corners somewhere. Of course, it is not like the US carriers really have that much better service overall, but they do have more redundancy built into their systems. The extra cash flow makes that easier to justify.