The interesting story is how mobile operators manage to charge more for sending 160bytes of data than they do for a call. And who was the genius that created the $Bn SMS business out of some spare capacity left in the GSM spec as a debugging feature.
Well, SMS is win-win from that perspective really. Sure, the 160 bytes of data costs 10 cents, which is a little crazy, but 160 characters replace a conversation that might last two minutes or more, with greetings and small-talk and such. Text is more efficient than speech for conveying information, and the social conventions around SMS make it even more so.
So consumers save money by sending a 10-cent SMS instead of making a 20-cent phone call.
I don't know where you live, but here in the states, an SMS costs 20 cents, for both the sender and the recipient, netting 40 cents for each message... It's a fucking scam that the clueless people put up with because they just don't care...
Interestingly when roaming in Europe, T-mobile charge me 40p/SMS and 20p/MMS. It is actually cheaper* for me to write down what I want to say by hand, take a photo of it, and send that than it for me to tap out an SMS!
Why is this? Well it suggests to me that they want to encourage people off the old SMS infrastructure, possibly due to capacity or manageability issues, and shift them onto the much newer GPRS/3G/whatever network.
* Yes I know you can send text by MMS and I have an E71 so typing isn't a chore anyway.
No - they know most people are going to use SMS and want to gauge them for a s much money as possible.
The SMS infrastructure is fantastic (for them), they use a spare 140bytes in a message the phone is going to send to the tower as part of a 'I'm still here' message anyway - and then charge you 40p for it!
Here (Ireland) it's pretty typical for phone plans to come with all sms free, or at a low price, such as 3c a text. Even on the worst available plans you might pay 9c per sms (and only the sender pays).
