Today's Most Popular Video
Nov 24, 2008 10:49 pm US/Central
Good Question: Why Is Texting So Expensive?
(WCCO)
Text messaging is becoming one of the most popular means of communicating. But if you don't have the right plan, it's also one of the most expensive. So why is it that sending a text is so expensive?
It's a parental nightmare -- opening that hundred page cell phone bill and finding an amount due in the several hundreds of dollars.
"I'm 14 and last month I sent 18,000 texts," texted one teenager to KDWB's Dave Ryan In The Morning Show.
Another texted, "I'm 13 and I owe my parents $100 because I texted 3600 times."
Most cellular phone companies offer packages of text messages. Typically unlimited plans cost between $10 and $20 a month. But if you pay for text messages by the message, it can cost between 10 and 20 cents a message. Sounds small, but if you get into texting it's easy to ring up tremendous bills.
"Last month I had over 50,500 texts," said one KDWB listener. Another said he had a monthly bill of around $2000.
Erica M. wrote on
Jason's WCCO.com DeBlog "The worst damage I suffered was a $300 bill. That was all because of Twitter," a popular Microblogging service that uses SMS text messaging to communicate.
"It's market driven," said Professor David Du, a networking expert in the Computer Science area at the University of Minnesota. "As long as users are willing to pay and feel there's a need, then the telephone company will certainly charge for it."
The charge is not an example of the cell phone companies passing on the literal cost of transmitting your text message, he said.
"The infrastructure is already in place," said Du, because of the existing voice network. The only cost is the software to move around the data, which he characterized as a virtually nonexistent cost.
Text messaging is a huge business for the phone companies. According to Informa Telecoms & Media, the cell phone industry will make $130 billion from messaging worldwide in 2008. To put that number in context, one year of box office tickets from Hollywood movies typically brings in around $30 billion.
Sen. Herb Kohl, a Democrat from Wisconsin, has called for an investigation of text message rates. Kohl sent letters to the leaders of the four top cellular phone companies, looking for an explanation for the "sharply rising rates" they charge people to send and receive text messages.
In 2005, the average text message cost 10 cents to send, and nothing to receive. In 2008, the average cost is 20 cents to send, and 20 cents to receive.
The cell phone companies have argued that it costs money to speed up the mobile Internet, and build new cellular towers
"From their perspective, there are other services they might not make money on, they might even lose money," said Du, explaining that the text message profit center is a way to cut cell company losses on other areas.
The only solution to rising costs is competition, said Du. And unless one of the major companies makes a strong effort to cut costs, there's no reason to expect them to fall in the future.
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
Couple Recalls Deadly Tour Bus Crash
Click to enlarge
Stumble It!
Reporting
