The New York Times has a good piece up on the heavy curtain of secrecy that surrounds mobile carriers’ profit margins on text messaging. In short, they’re bilking you… but you already knew that. But here’s a pretty simple explanation of why the text messages you pay twenty cents each to send costs the carrier basically nothing:
A text message initially travels wirelessly from a handset to the closest base-station tower and is then transferred through wired links to the digital pipes of the telephone network, and then, near its destination, converted back into a wireless signal to traverse the final leg, from tower to handset. In the wired portion of its journey, a file of such infinitesimal size is inconsequential. Srinivasan Keshav, a professor of computer science at the University of Waterloo, in Ontario, said: “Messages are small. Even though a trillion seems like a lot to carry, it isn’t.”
Perhaps the costs for the wireless portion at either end are high – spectrum is finite, after all, and carriers pay dearly for the rights to use it. But text messages are not just tiny; they are also free riders, tucked into what’s called a control channel, space reserved for operation of the wireless network.
That’s why a message is so limited in length: it must not exceed the length of the message used for internal communication between tower and handset to set up a call. The channel uses space whether or not a text message is inserted.
This is why, when you call up and complain about your service, they will often try to placate you with offers of “free text messages….” they are giving away an infinite resource with almost no cost to them but a perceived value to the consumer. Text messaging fees are the biggest scam in the mobile phone market.
What Carriers Aren’t Eager To Tell You About Texting [New York Times]