Verizon, AT&T try to explain why texting fees are 100% higher

UPDATE, 2:09 p.m.: Thanks to reader Tom Swifty for pointing out my bad math. Fixed headline to reflect that fees are 100 percent higher, not 50 percent. _____________________ Noted: Why does sendi…



UPDATE, 2:09 p.m.:

Thanks to reader

Tom Swifty

for pointing out my bad math. Fixed headline to reflect that fees are 100 percent higher, not 50 percent.

_____________________


Noted:

Why does sending a text message on your cell phone cost 20 cents? Congress was wondering the same thing and asked Verizon Wireless and AT&T whether the two companies colluded on pricing, according to a

Reuters report

(also cited by

BroadbandReports.com

and

FierceWireless.com

).

And not only did the fee seem high, but it’s double the rate from 2006, when texting was a mere 10 cents.

Lawyers from Verizon and AT&T argued that Congress was focusing on a tiny number of texts. Most customers were in some sort of monthly texting plan, so very few were affected by the doubling of the pay-per-use fee. Approximately, a mere 1 percent of texts sent were charged 20-cents per message, Reuters reported:

“The faulty notion that prices for text messaging have risen derives from an unduly narrow interest in the trend of a single pricing option for text messaging services, the pay-per-use option, when the vast majority of AT&T’s customers do not choose that option,” said Wayne Watts, general counsel of AT&T.

Verizon, in a

press release

, said that because of the bundling, the price per message has dropped to about 1 cent each. Both companies denied price fixing.

However, I could find no explanation as to why either company felt the need to double the price on the pay-per-text fee, especially if so few people use it.

BroadbandReports, a great source of telecom news, offers

its opinion

on why: “Of course the reason carriers uniformly raised SMS prices from ten cents to twenty cents (in

both

directions) was to drive customers to these bundle deals, which still tacks $5 to $20 per month on to subscriber wireless bills

for a service with virtually no delivery cost

.” (Bolded is the site’s own emphasis.)

Very true. Even many prepaid mobile companies are adding unlimited texting plans (see “

Are $50 unlimited plans latest trend? T-Mobile follows Boost

.”) What do you pay? Is it time to switch to a bundle plan in case you have

a kid like this one

?

For those wondering how much a text message does cost, the four major mobile companies do indeed charge 20-cents per text. See their sites:

AT&T, $0.20 (from

AT&T’s site

)

Verizon Wireless, $0.20 (from

Verizon’s site

)

T-Mobile, $0.20 (from

T-Mobile’s site

)

Sprint, $0.20 (from

Sprint’s site

)

International texting charges (from “

Text Mexico, Vietnam, the world for $10/month

” in March 2009):


AT&T

charges $0.25 to send, $0.20 to receive. Multimedia messages are $0.50 to send, $0.30 to receive. Details

HERE

. A $9.99

monthly plan

allows users to send 100 texts internationally. Received texts are counted as regular texts.


Verizon Wireless

charges $0.25 to send, $0.20 to receive. If you’re outside the U.S., sending texts cost $0.50 each but $0.05 to receive. Details

HERE

.


T-Mobile

charges around $0.35 to text internationally and $0.20 to receive. Details

HERE

.


Sprint

charges $0.20 to send or receive international texts. Details

HERE

.


Virgin Mobile USA

charges $0.20 to send, $0.10 to receive. Details

HERE

.


Helio

, now part of Virgin Mobile,

HERE

.


Around the web:


AT&T: High SMS Prices A ‘Faulty Notion’

(Broadband Reports)


Verizon, AT&T defend text messaging price policies

(FierceWireless)


AT&T and Verizon deny price-fixing accusations

(CNET)


The rising cost of texting

(CNET)


Verizon’s press release



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