Canada SMS rip-off: 4,900% mark-up
p2pnet news view Freedom | Mobiles:- “The consumer mark-up on some text messages is an estimated 4,900 per cent, according to a leading Canadian computer scientist who testified before U.S. senators on Tuesday.
“Srinivasan Keshav, Canada Research Chair in tetherless computing at the University of Waterloo, told lawmakers probing text messaging rates and the state of competition in the wireless telecommunications industry that the maximum cost of a single text message “very unlikely” exceeds 0.3 cents.
“In Canada, the large cellphone companies charge pay-per-use texters 15 cents to send a text message and, beginning next month, Rogers will join Bell and Telus with an additional charge of 15 cents to receive a text message.”
The three paragraphs above come in a Canwest News Service story saying the news on this mind-boggling mark-up was delivered by a Canadian computer scientist who was testifying before US senators on Tuesday.
But it won’t come to any surprise to p2pnet tech editor surfer, who goes even further.
“SMS transmissions are ’sandwiched’ between periods of inactivity on the network,” he said recently, continuing »»»
The original idea was to be able to send commands to a BTS to perform functions, maintenance, troubleshooting, and interconnectivity verification.
It’s also used for locating a cell phone, and in some instances, providing a connection to contact lists and other data.
SMS (text messaging) cost nothing. Nada. Zip. Zero.
It is part of the GSM protocol that allows the phone to connect to a BTS. An example of GSM is the bars on your phone to determine the signal strength, that’s sent across GSM for nothing.
SMS rides this same carrier wave, hence the overhead for this service is nothing.
The providers of mobile communications may have different names (railcars), but they’re all using the same ‘tracks’.
Consumers have been paying for this service in the price of the subscription since 1987.
And the messages are still ’sandwiched’ between phone calls using the network.
If GSM is the global standard, why are there ‘roaming’ charges when everyone is using the same standard on the same frequencies bouncing off the same towers?
SMS has an average global price of 0.11 USD and maintains a near 95% profit margin.
How much are you paying?
Now you know.
You do indeed. And much good may it do you against the sharks.
Meanwhile, “U.S. telecommunications executives, who testified alongside Keshav, dismissed his analysis,” says Canwest, noting:
“Randal Milch, executive vice-president of Verizon Communications Inc., said the Canadian computer scientist failed to consider the long-term infrastructure investments and costs of spectrum to make it possible for billions of text messages and trillions of voice calls to be sent daily.
“Calling Keshav’s testimony ‘interesting but not relevant,’ Milch added, ‘I believe that the question of costs is not relevant to this,’ explaining ‘that is not how prices are set in an unregulated industry’.”
“In Canada, a spokesperson for Telus reiterated that the ‘cost of spectrum has gone up dramatically’ to fund growth in the system.”
Text messaging — Short Message Service or SMS — “travels two wireless and one wired path,” says the story, adding Keshav, “considered this cost, the cost of storing a text message if the recipient were unavailable, and the costs of updating the billing and location databases to come up with an estimated total cost 0.3 cents per message”.
No need to stay tuned.
(I borrowed the great texting pic at the top from David Ing’s blog.)
Canwest News Service – Mark-up on text messages 4,900 per cent: Expert, June 17, 2009
periods of inactivity – The SMS rip-off, June 9, 2009
Use free p2pnet newsfeeds for your site. It’s really easy!
Subscribe to p2pnet.net | | rss feed: http://p2pnet.net/p2p.rss | | Mobile – http://p2pnet.net/index-wml.php
Net access blocked by government restrictions? Use Psiphon from the Citizen Lab at the University of Toronto. Go here for details.
June 18th, 2009 at 11:29 am
What about the text SPAM messages. I swear that it is Telus sending them just to charge me more. Also the spam comes as 2 messages. Half the message is writen on one text and the rest on another. With my phone there is no way to not accept them as Telus locks up their phones so you don’t have these choices. I hope the hackers are working on the unlocks for my phone. That is the best I can hope for.
June 18th, 2009 at 11:35 am
Bell SMS spams their own customers telling them to buy “rocket sticks”. Rogers spams their users. So I don’t see why Telus shouldn’t be able to SMS spam their own customers as well.
They are the law.
June 18th, 2009 at 1:21 pm
Since their little trick is out in public and being investigated by Congress, I expect the prices will go down soon.
This doesn’t affect me as I hate a cell phone and have never had one in my life. Don’t expect to be changing that anytime soon.
The idea that the Teleco is doing the spamming tells you when they need a bit more money they are happy to spam you. Not everyone will complain about being billed by their own carrier. No wonder they don’t allow you to refuse them.
June 18th, 2009 at 6:55 pm
Collusion. isn’t it obvious?
June 18th, 2009 at 9:43 pm
Jon posted my analysis of SMS prior to this story ‘breaking’, so in fact, we exposed this before they did.
stw
June 19th, 2009 at 1:14 am
No, I posted what you more or less regurgitated.
http://www.p2pnet.net/story/22840
look at the comments.
From my link and comments, which leads back to popular mechanics story
“A space scientist at the University of Leicester in the U.K. did the math and discovered that this is several times as much as it costs to transmit data from the Hubble space telescope back to Earth. And most of this cost is pure profit for the phone companies, who are able to deliver text messages for nearly nothing by piggybacking them on other transmissions. ”
ect ect..
P2Pnet wasn’t the first. P2Pnet didn’t break nothing. Your analysis is a regurgitation of the comment I posted.
May 22: http://www.popularmechanics.com/blogs/technology_news/4263454.html
May 22: http://www.howardforums.com/showthread.php?s=e9fff782d573016b8016be39f2e9fc28&t=1529756
Prior to June 6 & updated: http://www.popularmechanics.com/technology/how_to/4318204.html
June 6 My comment with references posted: http://www.p2pnet.net/story/22840
Your June 11th story: http://www.p2pnet.net/story/23046
There have been other cost analysis prior to this, but the popular mechanics/howardforums one’s are the most recent.
I believe DSLreports may have this as well going back further.