There are no backhand calculations done but I find the SMS rates to be very expensive. I cannot really crib about it but I know that something that doesn’t cost the company a single paisa, is being sold at usurious rates. I wish I could research more on that, but for the time being I am linking to an excellent NY Times article (for US based companies) where the mainstream newspapers ARE really vocal about the cost structure. It is not an idealized world but then nothing is perfect.
I quote the relevant text.
Text messages take up very little space — about 140 bytes, as they are being transmitted. That’s really why text messages are kept short. How much are we really paying for them? As much as $1,498 per megabyte. Here’s some of the math:
There are 1,048,576 bytes in a megabyte, so 7,490 text messages are transmitted in each one. The cellphone companies charge about 20 cents a text message, adding up to that $1,498 a megabyte. (And yes, you are charged that rate whether you write 160 characters or just “LOL.”)
That’s a huge margin indeed!!
It may be argued that the rates are not equivalent in dollar terms here. But I have always argued that the voice and the sms calls are way to expensive even after the companies have recovered their expenses. I have also argued that in real dollar terms we are a third world country where it takes less than a dollar to subsist. Companies are content in charging you upfront for the “service charge” of giving you the service and charge you each time you make a call. That’s fair on their part but unfair from a consumer’s point of view.
But the unlimited plans, generally costing about $20, are only a relative bargain. The average texter sends about 500 text messages a month, according to Nielsen, the media measurement firm. That drops the price of a single text message to 4 cents, or to $300 a megabyte.
Nielsen says the average teenager sends 3,146 messages a month. Even at that volume — an average of about 104 texts a day — the phone company is extracting $47.62 a megabyte.
How far is it true in Indian context?
There is no fancy metric here in India and I distrust the crap being dished out by many self styled firms. It remains high on crap without making any sense.
Still, the very thought is chilling. Really.
With minor modifications, companies are making a HUGE killing. No wonder it is such a profitable business, never mind the huge bloated flotsam claiming that it is a hugely competitive market.