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http://gthing.net/the-true-cost-of-sms-messages/ wrote: I just found out that AT&T (A-fee&fee?) is raising their text message pricing. When I first signed up for AT&T 6 or so years ago it cost 10 cents to send an SMS message, and it was free to receive them.

When AT&T switched to Cingular the price of sending a message dropped to 5 cents, but they started charging for incoming texts - also 5 cents. Assuming you send a message for every message you receive, this works out at about the same price as before.

AT&T came back online and phased out the CIngular brand name, and prices were again changed. This time to 15 cents each way.

More changes have taken place that I can’t quite remember. At one point text messages were 10 cents either way, and at another point they even included MMS (multimedia messages) at the same price as SMS.

As of March SMS messages on AT&T will cost 20 cents and MMS will cost 30 cents - both to send a receive.

So let’s do some math here, and figure out how much this simple transmission is actually costing us.

A standard SMS message contains up to 140 bytes (1120 bits) of data - this takes care of the 160 characters allowed in your text message. This might not make sense at first, until you realize that SMS uses 7 - not 8 - bit characters - leaving you with 128 possible character values instead of the normal 256. So 1120bits/7bits = 160 characters.

So our total message length is about a tenth of a kilobyte (.13671875 Kbytes). In terms that the iPod generation would understand - if you had an iPod with a tenth of a kilobyte you could fit 1/4000th of a song on it. I assume here and for the rest of this article that 1 song = 4 Megabytes.

If you divide 140 (the total number of bytes available to you) by 20 (the cost per message), you find that you are paying 1 cent for every 7 bytes of data. This leaves you with a cost of $1,497.97 for the 1024Kbytes contained in a single megabyte. iPod users: It would cost you $5,991.88 to transfer - not even to buy - a single song via SMS.

By comparison, I pay $50 a month for a soft bandwidth limit of 500 gigabytes through a local ISP. That comes out to 512,000 megabytes or 10,240 megabytes to the dollar. This allows me to transfer 2,560 songs for the same price as a Junior Bacon Cheeseburger off the value menu at Wendy’s: $1. I will use this my standard measurement for the rest of this article.

So far I can make the following statements concerning the costs of bandwidth:

Cost to transfer 2560 songs:

From my ISP: $1
Via SMS messaging: $15,339,212.80

But wait, there’s more!

When calculating SMS charges, most people don’t take into consideration that the message is really being paid for twice! If I send a message to another AT&T user, I am paying to send it AND they’re paying to receive it! This should probably be illegal, but that’s for another discussion.

So how much does an SMS message actually cost? Not 20 cents - but 40 cents! This doubles all of my numbers above.

Furthermore, my above figures estimate that people actually use all 160 characters available to them. Say people on average actually only used half of that (which is still being generous) - then their price of data has again doubled from the numbers I gave above!

Making adjustments for both of the above statements, we realize that our above number isn’t even close to correct! Corrected, the comparison looks more like this:

COSTS OF TRANSFERING 2,560 MP3s:

via my ISP: $1
via SMS: $61,356,851.20

Phew! THAT is premium data! It’s no wonder that SMS texting alone is a 100 Billion dollar a year industry!

How big is that? Take all of hollywood movie box office revenues worldwide. Add all of the global music industry revenues. And add all of videogaming revenues around the world. Even all those three together, we don’t reach 100 billion.

Let’s even go more premium - how much would it cost to hand deliver data?

The U.S. Postal service is currently charging 41 cents for this privilege (hmm.. only one cent more that AT&T charges to automatically handle an SMS message). So how much written data could we send in a letter?

Google says 250 is considered the standard words per page measurement, and a sheet of paper weighs about 4.5 grams. The U.S. postal service allows your letters to weigh up to 1 ounce before charging you more, which is just over 28 grams. So you could send 6 sheets of paper, minus 1 for the envelope. If you write on both sides that gives you 2500 words (10 pages x 250 words).

According to this page, the average english word is 5 characters long. Add in a space for every word and you have 6 characters per word or 1500 characters for page for a total of 15,000 characters.

Now we are not limited in any way in the types of characters we can use, but let’s assume we are using a 256 character (8 bit) set.

Our letter therefore gives us ~14Kbytes for 41 cents. To transfer an MP3 using this method, we would be looking at about $119.95. To transfer 2,560 MP3s, that comes out to only $307,072. We would also need to take into consideration the bulk rate, but for the sake of argument (and because I don’t feel like figuring it out), let’s leave it where it’s at.

The cost would drop dramatically if we compressed the data onto, say a DVD and our cost would be something more like $1.20.

Updating our chart from above:

COSTS OF TRANSFERING 2,560 MP3s:

TCP/IP: $1
TCP/SMS: $61,356,851.20
TCP/USPS: $307,072.00 (Bits written out on paper)

So getting a SMS delivered is bit for bit 200x more expensive than getting a message hand delivered to your doorstep anywhere in the United States.

What exactly justifies making SMS messages sixty one million times more expensive than ISP data and 200x more expensive than TCP/USPS? How come technology, communication, and infrastructure is getting cheaper while the costs of SMS messages are increasing exponentially? My theory: SMS messages are transfered over air made of solid gold.

KA-T70 wrote: ummmm, cell phone service up here is hurribly expensive. One of the leading and most expensive phone service here is Verizon, unfortunately I'm signed up with them, I get raped hard by them on a regular basis every 20 something of the month. I've never seen a phone bill in the 100-200 region. 3-1000 is more like it. I have 1500 free text and 1500 anytime minutes and free calls to verizon cell phone holders and free calls from 9pm nights and free calls all weekend. Doesn't mean u aren't raped. You got to pay to receive calls and text messages. Pay to send obviously and for some reason 80% of the people i know have some other carrier. If i got rid of this phone I'd save at least 300USD a month. If i don't use it i pay 150. if i get rid of it with 2yrs i pay 200 to end the contract.