In comparison to the other ways in which consumers spend money, sending a text message seems relatively cheap. The truth, however, is that mobile users pay 7314% more to send a text message than they actually should.
You don’t have to look very far to see the impact that text messaging has had on the way that people communicate these days. Take Twitter for example. People are going crazy for the service, which basically is just at mass text messaging platform to let everyone know what you’re currently up to. Mobile providers, however, are using the service as yet another method of price gouging their users.
Over a year ago, my colleague David A. Utter brought to light some very interesting numbers comparing the cost of providing broadband service to users to what consumers actually end up paying, and the gap is ridiculously huge.
So, it really shouldn’t be any secret that mobile providers would employ similar tactics in pricing ancillary services for their own users.
First, let’s look at the standard rate of $0.15 cents that Verizon charges per text message for users who haven’t purchased a text package. It seems like a small figure at first glance, but in truth it represents a gargantuan markup compared to what most other data transfers cost.
Ben Popken over at Consumerist has a great write-up on this. When he did all the figuring between how much it costs to send a text message kilobyte versus a data kilobyte (which would be handled exactly the same by the network) he came up with these numbers:
That’s $.015 per data kilobyte versus $1.09 per text message kilobyte. In other words, a markup of 7314%. Other cellphone companies charge comparable rates.
You read that correctly. Verizon text messages cost 7314% more to send per kilobyte than an equivalent amount of data.
So why the enormous difference in pricing? One possibility is that mobile providers such as Verizon would rather that customers purchase a text messaging package rather than pay on a per-use basis, so that the company could enjoy a guaranteed monthly revenue stream. And when you’re only looking at $0.15 cents a text message, it’s pretty easy to disguise the markup.
Verizon had not responded to requests for comment at the time of publication.
