Recently, the price of text messaging offered by major wireless carriers has been a hot topic in the news. Working for a tech firm – that provides a technology for data exchange – makes me wonder: why is there such a huge markup on SMS? Text messages, after all, are just data.
Now that text messaging is mission-critical to many businesses and wildly popular with consumers, complaints around reliability and pricing are getting attention. As a result, the carriers might lower their prices. If the goal is to lower prices and improve reliability, what we really need is new competition. Let’s face it, telecoms have little incentive to innovate – mobile phones come with an SMS enabled program on them, and so that is what people use. SMS is just a communication platform. It is not secure, reliable or cost efficient. Why are we locked into it?
Many mobile phones are already Internet enabled. Rather than transmitting your text messages with SMS you could use an alternative application. Obviously, as a company with its own communication platform offering, we think this is a great idea.
In the same way that Ribbit offers a service in which any developer can voice-enable an application, Linxter offers a service in which any developer can message-enable their application. With Linxter, you could send text messages without the cost and constraints of SMS.
Below is an overview of the “text” and “data” service plans offered by four major U.S. carriers. The way offerings are presented by each provider makes it difficult to do a direct comparison between companies and are not meant to be exact.
SMS Prices
| Company | Small package | Medium | Large |
|---|---|---|---|
| Verizon | $10 (500 messages) | $15 (1500 messages) | $20 (5000) |
| AT&T | $5 (200) | $15 (1500) | $20 (unlimited) |
| TMobile | $4 (400 messages) | $10 (1000 messages) | $15 (unlimited) |
| Sprint | Na | Na | $10 (unlimited) |
Data Service Prices
| Company | Price |
|---|---|
| Verizon | $15 (5GBs +$0.49/MB overage) |
| TMobile | $6 (unlimited) |
| AT&T | $35 (unlimited) |
| Sprint | $15 (unlimited) |
So, let’s crunch the numbers…
What is SMS? It’s a service that can transmit a message of up to 160 characters of text (generally equals about 160 bytes of data).
Using our chart above, let’s compare the cost of Verizon’s data service ($15 per 5 GBs) to their SMS package (5000 messages @ $20.00/month).
5000 messages @ 160 bytes = 800 kilobytes
$20/800 kilobytes = $0.025 per kilobyte, or $25 per megabyte
Hmm… So, when you transport text via their data service the cost is $0.003 per megabyte but when you use SMS the cost is $25 per megabyte! That’s a big price difference for two services that do the same thing (transfer data).
Linxter allows developers to create messaging solutions that use the Internet as their communication platform. Linxter Beta 3 will be available Q3/08. Linxter 1.0 will be available Q4/08. The mobile version of Linxter is scheduled for release Q1/09.
We will be releasing the source code for a complete, secure and reliable text messaging client which anyone can use and develop against.