What Carriers Arent Eager to Tell You About Texting

Big Don

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What Carriers Arent Eager to Tell You About Texting

December 28, 2008
The New York Times
EXCERPT:




By RANDALL STROSS
TEXT messaging is a wonderful business to be in: about 2.5 trillion messages will have been sent from cellphones worldwide this year. The public assumes that the wireless carriers costs are far higher than they actually are, and profit margins are concealed by a heavy curtain.
Senator Herb Kohl, Democrat of Wisconsin and the chairman of the Senate antitrust subcommittee, wanted to look behind the curtain. He was curious about the doubling of prices for text messages charged by the major American carriers from 2005 to 2008, during a time when the industry consolidated from six major companies to four.
So, in September, Mr. Kohl sent a letter to Verizon Wireless, AT&T, Sprint and T-Mobile, inviting them to answer some basic questions about their text messaging costs and pricing.
All four of the major carriers decided during the last three years to increase the pay-per-use price for messages to 20 cents from 10 cents. The decision could not have come from a dearth of business: the 2.5 trillion sent messages this year, the estimate of the Gartner Group, is up 32 percent from 2007. Gartner expects 3.3 trillion messages to be sent in 2009.
END EXCERPT
Those of you who are prolific texters will (hopefully) think of this all day.
 

Tez3

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I can't remember who it was other than somebody who owned a mobile phone company who said that he loved people who texted because it was the best way for him to make money without having to do anything! I'll try and find the quote.
 

MBuzzy

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Personally, I see no problem with it. People who use the service are aware of the cost. If they use the service, they incur the cost. The corporations are able to charge whatever people are willing to pay and whatever the market will bear.

This is not something like gasoline that everyone needs and can't make a living without....this is not even a convenience, it is just another way to communicate if you don't actually want to call. It's not even that much easier, IMO.
 

Kreth

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I consider it a moron tax. Between texting and AIM, we have a generation of kids, some of whom are unable to communicate in normal written English.
 

Bob Hubbard

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That's ok to me. Let the morons pay it. I had texting disabled on my phone because I can't stand it.
 

BrandonLucas

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If it's not a necessary thing to have, why not charge more, especially if it's a popular thing? If people would rather take the time out of their day to type out abbreviated words and sentences rather than actually call the person, then they should be charged more.

I'm guilty of texting at times, myself. But I'm usually texting because I'm at work and can't talk, but it's usually not a necessity. If it's an emergency, I can take the call...so really, I can do without texting. And honestly, I hate texting. It takes too much time and most of the time something gets mispelled. I only do it because the people I talk to insist on texting as opposed to talking.

I should probably make new friends...lol...except one of them is my wife.
 

MBuzzy

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Ah, capitalism.....People want something, use it a lot and the price rises. What a crazy concept!
 

MA-Caver

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Ah, capitalism.....People want something, use it a lot and the price rises. What a crazy concept!
It's the American way.

I use AIM quite a bit but at the moment don't have a cellphone so it's not an issue but it is a thought. Since most of my associates/friends are deaf then texting is the only viable option (for us) to communicate to each other and with hearing people.
Either way texting shouldn't be charged extra just because people like to use it. If it puts a resource drain on the company providing the service then okay that is understood but otherwise it's like being charged a penny for each colored sprinkle on that chocolate donut you have each morning. That's just being plain greedy.
 

jks9199

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That's ok to me. Let the morons pay it. I had texting disabled on my phone because I can't stand it.
I have texting and messaging on my phone; I don't use 'em a lot, but they are useful. Whether it's sending a picture (I once sent a wanted poster to another officer out with a suspect that way!), or just a quick message from or to my wife -- text messages can be convenient and easier than an actual call. Especially if I'm somewhere I don't want to talk on a phone.
 

jks9199

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It's the American way.

I use AIM quite a bit but at the moment don't have a cellphone so it's not an issue but it is a thought. Since most of my associates/friends are deaf then texting is the only viable option (for us) to communicate to each other and with hearing people.
Either way texting shouldn't be charged extra just because people like to use it. If it puts a resource drain on the company providing the service then okay that is understood but otherwise it's like being charged a penny for each colored sprinkle on that chocolate donut you have each morning. That's just being plain greedy.
Excellent point! Texting does enable you to "call" a deaf person without going through a relay service...
 

Steve

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What an interesting bias. No one begrudges McDonalds or Starbucks the obscene profit margin on a cup of coffee. No one begrudges Applebee's for serving what amount to microwavable dinners at an extreme markup. The Outback's bloomin' onion cost pennies, but they sell it for about $8.

Standard markup for furniture is 200% plus shipping. Jewelry starts at about 400%, so even if you get that necklace for 1/2 off, the jeweler is still likely making a 100% profit. And let's talk about banks, the fees they charge and the usury that has become commonplace. Bottom line is that if people really spent their time worrying about how much over cost they pay for any product, we'd all go crazy.

I don't think this is a big deal. For me, it's a matter of time and how much mine is worth. My wife and I text all the time. It's very convenient for her to text me a shopping list, or let me know when she's coming home. When we're at work, I don't always have time to take a call, and neither does she, but I can check a text in just a couple of seconds. Texting is great.
 

CoryKS

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I consider it a moron tax. Between texting and AIM, we have a generation of kids, some of whom are unable to communicate in normal written English.

I came in here to say this. I would try to see how much money I could get from people who send "LOL OMG RU4RL?" to each other too.

Monkeys with a crack pellet dispenser, the whole lot of 'em.

/crotchety
 

Steve

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I came in here to say this. I would try to see how much money I could get from people who send "LOL OMG RU4RL?" to each other too.

Monkeys with a crack pellet dispenser, the whole lot of 'em.

/crotchety

Get off my lawn, you damn kids! And take your newfangled contraptions with you! :)

If you can't see the value in something, then it must have no value. That about right?
 

shesulsa

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As a mom of three, I network with a lot of other moms who also have three or more kids. Coordinating friend schedules without disrupting life with a phone call every 10 minutes can be useful - especially when you have to attend a mandatory parent meeting, the likes of which you've had repeatedly over the years and have heard a gazillion times before and still need to settle some team mom business. Or if you need to communicate with a deaf person. Or if your daughter's grade depends on being a good audience member and you need to find out when she will be released from the stranglehold that is band rehearsal for the top scholastic jazz contenders in the state.

There are still times I refuse to text OR take a phone call, but my daughter can shoot me a text to tell me she needs a ride or her brother has a bloody nose while I'm at the theater without disrupting everyone.

There are advantages ... but when it becomes your life ... then we need to take a more serious look at one of the messages in Wall-E: we're getting fat, lazy, uneducated, distracted.

Believe me, I know I pay a crapload of money for something VERY inexpensive in cost. But such is the price for convenience, no?
 

MA-Caver

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What an interesting bias. No one begrudges McDonalds or Starbucks the obscene profit margin on a cup of coffee. No one begrudges Applebee's for serving what amount to microwavable dinners at an extreme markup. The Outback's bloomin' onion cost pennies, but they sell it for about $8.

Standard markup for furniture is 200% plus shipping. Jewelry starts at about 400%, so even if you get that necklace for 1/2 off, the jeweler is still likely making a 100% profit. And let's talk about banks, the fees they charge and the usury that has become commonplace. Bottom line is that if people really spent their time worrying about how much over cost they pay for any product, we'd all go crazy.

I don't think this is a big deal. For me, it's a matter of time and how much mine is worth. My wife and I text all the time. It's very convenient for her to text me a shopping list, or let me know when she's coming home. When we're at work, I don't always have time to take a call, and neither does she, but I can check a text in just a couple of seconds. Texting is great.
I've often wondered at the seeming high cost of everything now-a-days. But I remember my father telling me about when "he was my age" :rolleyes: and how $0.75 cents would get you a full steak dinner with salad and drink and dessert but then $0.75 cents was roughly a day and half wages back then.
But yeah... simply it's greed when they mark it up so high. But not always... for one thing, when I worked as a furniture handler I could see 100% (American) Oak dining room sets priced at $1700 and the sucker is made in China. American wood shipped all the way to China to be made into furniture that'll be shipped all the way back to America to be sold. HUH??
Quite simply... American labor/craftsmanship is damned expensive.

But this is topic veering so needs another thread I think.

Shesulsa, "But such is the price for convenience, no?" I say no. Such is the price of greed and the willingness of the consumers to PAY for it. If you got a product and set it out with a certain price tag on it and nobody buys it then you either remove the product or lower the price. But set out a product with a price tag on it and people DO buy it then you either keep it at that price or raise it til people stop buying it and then lower it to where folks will buy it again. Market price testing is more like it but the idea is to see how far people will go and how much will they pay to have... "THIS!"
They did it with our gasoline, they'll damn sure do it with other things we think we need as well.
 

girlbug2

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Either way texting shouldn't be charged extra just because people like to use it. If it puts a resource drain on the company providing the service then okay that is understood but otherwise it's like being charged a penny for each colored sprinkle on that chocolate donut you have each morning. That's just being plain greedy.

The markup on a lot of items have nothing to do with resource drain on the company. For example, it costs Mc D's a few cents to fill your super sized coca cola but you pay four bucks. Yes, greed is the American Way!
 

BrandonLucas

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I've often wondered at the seeming high cost of everything now-a-days. But I remember my father telling me about when "he was my age" :rolleyes: and how $0.75 cents would get you a full steak dinner with salad and drink and dessert but then $0.75 cents was roughly a day and half wages back then.
But yeah... simply it's greed when they mark it up so high. But not always... for one thing, when I worked as a furniture handler I could see 100% (American) Oak dining room sets priced at $1700 and the sucker is made in China. American wood shipped all the way to China to be made into furniture that'll be shipped all the way back to America to be sold. HUH??
Quite simply... American labor/craftsmanship is damned expensive.

But this is topic veering so needs another thread I think.

Shesulsa, "But such is the price for convenience, no?" I say no. Such is the price of greed and the willingness of the consumers to PAY for it. If you got a product and set it out with a certain price tag on it and nobody buys it then you either remove the product or lower the price. But set out a product with a price tag on it and people DO buy it then you either keep it at that price or raise it til people stop buying it and then lower it to where folks will buy it again. Market price testing is more like it but the idea is to see how far people will go and how much will they pay to have... "THIS!"
They did it with our gasoline, they'll damn sure do it with other things we think we need as well.

I've bolded what I think is the key to what you posted here: the phone companies at this point think that we need text messaging, so they jack the prices up. The rate that people send texts, of course it's going to appear that people need to have that feature. The numbers support that...

But do we really need it? Haven't we gone this long without having the capability to send texts and done alright? What we're doing now is proving the point to the phone companies that we do in fact need to have this feature, and every person that sends out texts for no other reason than to chat with a friend supports that claim.

Texting is a feature, a convenience. It's not a necessity. For those who are hearing impaired, why don't the phone companies come out with something that only texts, so that they don't have to pay for the use of the actual phone itself? But then, everyone would start flocking to that as well, and it would no longer be a machine of necessity, it would turn into the latest, hottest thing, and the phone companies would find a reason to charge for that too.

The problem is that something can be created with the greatest of intentions, and then everyone else that doesn't need to use the gadget comes along and decides that it's the cool thing to do, which jacks the price up for everyone.

I hate to say it, but the phone companies aren't the bad guys here...we are.
 

Makalakumu

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Ah, capitalism.....People want something, use it a lot and the price rises. What a crazy concept!

This isn't capitalism. This is a monopoly and THAT is the issue here. Whether you like texting or not, when companies consolidate and then communicate with each other to raise prices, that is illegal.

Normally, when you reduce competition and the demand form something increases, the prices will rise anyway. There should be no need to commiserate.

In this situation, I am concerned about how the phone companies reduced their competition and exactly how they are cooperating to raise prices.

If you let these guys get away with forming a monopoly, we're only going to see more of it. And its bad enough already!
 

BrandonLucas

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This isn't capitalism. This is a monopoly and THAT is the issue here. Whether you like texting or not, when companies consolidate and then communicate with each other to raise prices, that is illegal.

Normally, when you reduce competition and the demand form something increases, the prices will rise anyway. There should be no need to commiserate.

In this situation, I am concerned about how the phone companies reduced their competition and exactly how they are cooperating to raise prices.

If you let these guys get away with forming a monopoly, we're only going to see more of it. And its bad enough already!

The best way to fight it is to have everyone collectively stop sending text messages...then the phone companies won't have a reason to charge.
 

Carol

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This isn't capitalism. This is a monopoly and THAT is the issue here. Whether you like texting or not, when companies consolidate and then communicate with each other to raise prices, that is illegal.

Normally, when you reduce competition and the demand form something increases, the prices will rise anyway. There should be no need to commiserate.

In this situation, I am concerned about how the phone companies reduced their competition and exactly how they are cooperating to raise prices.

If you let these guys get away with forming a monopoly, we're only going to see more of it. And its bad enough already!


Its not a monopoly. The only monopoly that existed in the U.S. telecommuncations system was the Bell System which the target of a federal antitrust suit that began in 1972 and ended with the divestiture on January 1, 1984.

http://www.corp.att.com/history/history3.html
 
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