I was looking the other day at my mobile phone plan, more specifically the data portion of my plan which allows me to access the internet on my phone. This got me thinking, if I’m am to go over my data allowance it would cost me an extra 35cents per megabyte. Now this if fair enough but then I looked at the charge for every single SMS I send…25cents…

When we break down what exactly an SMS is it is kind of mind boggling to think that mobile carriers can get away with charging that price. An sms is a very simple way of sending information and each SMS that you send can only contain 160 characters. Within the message each character that you input takes up a small amount of space.

• 1 SMS = 160 characters = 1120 bits (the size of the data)

To put the value 1120 bits into perspective lets look at what exactly that means:

• 1 Megabyte = 1000 Kilobytes
• 1120 bits = 0.14 Kilobytes

Now I understand that SMS is not sent using the data allowance on your phone but I thought it would be a good comparison to see how much you get for what you pay. Now broken down if I am being charged 35c for every Megabyte of data, this divided by 1000kB would equate to 0.03 cents for every 1 Kilobyte of information. Given that the size of a single SMS is approximately 1/7 of a Kilobyte that would equate to much less than 1 cent. This means that for every individual SMS I send whether I use all of the characters or not I am paying 25cents.

When in actual fact if I am to use every character possible the cost would be approximately 1 cent to send this information based on the cost of mobile data. So what gives mobile providers? It would seem to me that we are being grossly overcharged for such a simple and small portion of data being transmitted over your networks.

Now while I don’t expect a service provider to only charge this amount as they have to take into consideration wages, infrastructure maintenance, other expenses. It would still seem to me that they are overcharging for this. Perhaps the reason for the price of 25 cents if more of an economic thing, for if they are to lower the price it would make it so much more affordable to send a text, we would then find ourselves willing to send more and more. This could possibly increase demand on the mobile providers to the point of flooding their networks, yeah this is possible and maybe they have found that 25 cents is the perfect point of equilibrium.

But really the companies must be making so much money of this business which we have all come to rely on and accept the price for what it is. I think that moving forward and as we see more and more smart-phones like the iPhone, Blackberry etc it would be reasonable to assume that services like instant messaging or email could take over our reliance on SMS and all at a much lower cost to ourselves. Especially as it becomes more possible for devices to push notifications to us from these programs like email can on the iPhone and Blackberry, it will be just as instantaneous as an SMS but cheaper!

Any way these are just my thoughts on the topic and I thought it would be interesting to break down the actual cost of an SMS as though it was data being sent over the mobile broadband networks. If you have any thoughts feel free to leave a comment!