Friday, May 8, 2009

The Text Messaging Fleecing of America

You just bought a new iPhone for a couple hundred dollars plus a little over a hundred per month for voice and data service. Then they have the nerve to charge another $15/mo for text messaging! Why is this? Isn't text the same as data? Well, sure but....

In the late 90s, text messaging rolled out on most wireless carriers, which caught on with early adopters and college/high school students. It was a new trend and new way of communicating well worth the $10/month for relatively few (~50) messages. Several years later, blackberry phones and other smartphones came along with email capabilities and text plans seemed redundant simply because texting was not yet so pervasive. However, the trend continued and now there are far more text messages being sent than there are phone calls.

Here we are a decade later with smartphones on the cusp of becoming standard issue, yet carriers are still charging an added fee for texting even after we pay for an unlimited data plan. One response would be to not pay for the text plan and use an Instant Messaging application. After all, then you can contact people at their PC, not just via their phone. The problem is that most people don't yet have phones capable of running IM applications, but we will reach the tipping point within two or three years.

The next logical step for smartphone owners is to use a free messaging application that can send text messages for free outside of the carrier's sms channel. Carrier's are getting $5-20/mo from nearly every customer right now and they don't want it to go away. They are content with the text messaging standard. After all, it's a premium subscription service that is relatively cheap to support. Google Voice is one way around this, but the service is not publicly available yet. Release is imminent, however.

For a smartphone owner (iPhone, Blackberry, Windows Mobile, Android, Symbian) it doesn't make much sense to have a plain text messaging application like this that even costs $5 total, much less $20 every month. Instant Messaging is free with a data plan, but the carrier knows we need backward compatibility with legacy txt-only users so they will continue to milk it.

For anyone thinking about a smartphone purchase, consider the savings of ditching the text plan and the data plan may look much more attractive. With Google Voice, things will begin to shift quickly. It will allow us to completely abandon text messaging plans while holding onto the functionality. It will also bring new pricing plans that allow unlimited calling for more reasonable monthly fees. Text messaging plans will still be offered, but fewer customers will be paying the surcharge.