The cost of text messaging
Sideswipe reveals:
“According to Nigel Bannister, a scientist at the University of Leicester, sending a text message can be up to four times more expensive than downloading the same amount of data from the Hubble Space Telescope.
Sadly it is true.
A text message can be 160 characters, equalling 160 bytes (actually 140 bytes – 160 7-bit characters, so the figures that follow are conservative). Given that a text message costs roughly 20c to send, some simple arithmetic can be used to work out how much it costs per megabyte:
$0.20 / 160 = $0.00125 per byte
$0.00125 x 1024 = $1.28 per kilobyte
$1.28 x 1024 = $1311 per megabyte
If we had to pay text message bandwidth rates for home or office internet connections: downloading a 4Mb song would cost $5244.00, a 500Mb TV episode would cost $655,500 and downloading a 1Gb movie, $1,342,464.”
One nice thing about Blackberries is you can PIN people instead of SMS them, and it costs you nothing. But you need to know their Blackberry PIN.
April 23rd, 2010 at 12:11 pm
Maybe we should get NASA to relay for us and cut out the middle man.
April 23rd, 2010 at 12:12 pm
How many mobile networks are there with coverage in Leicester?
Makes a bit of a mockery of the theory that markets deliver the best possible price to consumers…
April 23rd, 2010 at 12:19 pm
How cell phone coverage in Cuba RRM?
Go check it out for us will you.
April 23rd, 2010 at 12:23 pm
^^^ I’m not advocating communism fuckwit.
You really need to check this “you’re either with us or you’re against us” attitude in at the door.
April 23rd, 2010 at 12:41 pm
Murray – http://www.havanatimes.org/?p=5922
RRM, costs and sell prices don’t have a direct relationship. Any business will seek to maximise profit wherever it can.
April 23rd, 2010 at 1:03 pm
Blackberry Messenger (BBM) is quite cool but unfortunately if you want to chat with someone they need to have a blackberry also (as well as then having to know their pin).
Google talk is also another cool app you can have on your phone. You can not only IM people with google talk on their phones but also people at desktops signed into gmail. Similar problem as above though, they need to have a gmail account.
Email on phones is a lot better because not only can I message friends who have email on their phones also but those that don’t often work on computers and I can message them when walking near their workplaces, and it doesn’t matter if they have a personal email account on a mac or a work one on a pc it still works.
April 23rd, 2010 at 1:13 pm
Yep, but it still uses less resource than paper.
And breathing wastes oxygen, maybe we should stop that too.
April 23rd, 2010 at 1:26 pm
BBM messenger is great. you can add people using their PIN or email address.
I also have yahoo messenger and MSN messenger installed on my bberry – but ya pay for data using those. i suspect they dont use much though, nothing scary has ever appeared on a bill.
April 23rd, 2010 at 1:36 pm
Nothing new in the math here. I recall doing this calculation when I sent my first SMS on the BellSouth network in the early 90′s.
SMS has always been value priced, rather than cost-plus priced here in NZ. Until it’s classified as a Human Right under some forthcoming ‘non binding’ UN treaty, or so classified by a socialist government, we should just let consumer decide how much they want to buy at a price they’re happy to pay. And competing carriers will jump in with bundles and lower-priced services as has happened over recent years.
April 23rd, 2010 at 4:05 pm
The linked article doesn’t give a price for Hubble data transfer, so we can’t work out how it is derived. But I guess it is one sender and one receiver (and maybe TDRSS?) transferring tens of gigabytes a day. They don’t support a national network, roaming, or the overhead of routing a few hundred bytes millions of times a day. I don’t see that there is any comparison.
April 23rd, 2010 at 5:00 pm
The reason that the price to consumers in a free market doesn’t come anywhere near the costs is because the mobile market is because of the high costs of entry. The average New Zealander couldn’t afford to set up a nationwide mobile phone carrier, or even one covering a city, and those few that could have little incentive to enter the market to compete on price – the big players will just temporarily reduce their prices as well, until the the new entrant is out of business. This is an example of an ideal market for the government to get involved in and provide an option that provides services to consumers at a conservatively high estimate of cost. An alternative option could be to implement price controls.
April 23rd, 2010 at 10:14 pm
This is a ridiculous article. Why stop there? Why not compare the electron volts consumed in sending text messages versus an email? Why not compare the signal efficiency? You could get all sorts of large ratios that are just as meaningful.
Telecommunications is a fixed cost business folks. That means pricing at or near marginal cost puts you under. Most of your revenue goes to fixed cost recovery, which means a) demand, not variable cost, is the most important driver of price, and b) prices for services of similar cost can vary greatly if the demand for them is different.
This entire debate here on Kiwiblog is plagued by angry people who think they know better about how to run a mobile phone business but who plainly do not understand the industry’s economics.
Consider this: if Vodafone and Telecom are creaming it, as everybody here seems to think, then 2Degrees should have no trouble coming in and doing quite well at lower prices against these alleged monopolists. Now 2Degrees has made a good start by the looks of it, albeit in extremely favourable conditions with helpful regulation and Telecom stumbling, but who wants to bet 2Degrees recover their cost of capital? If entrants struggle, then that suggests the incumbents aren’t too far off the competitive mark.
April 23rd, 2010 at 11:16 pm
Further to bens comment, NZs mountainous/undulating terrain, combined with our sparse and very distributed population has made for expensive cell site network. It makes the radio frequency management a nightmare too.
Can’t recall precise details from my mobile carrier days, but seem to remember that NZ has one of the worst sites:population ratios in the world, for countries where >95% of the population live inside coverage.
Add to all this the tortuous resource consent process (often more costly than the cell site hardware itself, installation and 10 year site lease) and the carrier’s return on invested capital figures don’t look outlandish, despite seemingly high charges.
So I’m just saying that looking overseas and comparing (then complaining) isn’t really comparing apples with apples.