December 29, 2008 What’s fair and reasonable pricing behaviour in business? There’s an excellent NYT article entitled “What Carriers Aren’t Eager to Tell You About Texting” which might encourage you to think about this next time you send a text message. The cost to the Telcos of sending text messages is negligible because the space-limited texts ride for free inside a control channel reserved for operation of the wireless network - so every cent of the 20 cents you pay for a text message is profit to the Telco. Gartner reports there were 1.9 trillion text messages sent in 2007, 2.5 trillion in 2008, and an anticipated 3.3 trillion in 2009. Our normal concept of fair pricing considers products whose costs rise proportionally to volume. Author Randall Stross points out that the cost of text messaging in the United States has doubled in the same period.
The lucrative business of text messaging
About the Author
Mike grew up thinking he would become a mathematician, accidentally started motorcycle racing, got a job writing road tests for a motorcycle magazine while at university, and became a writer. As a travelling photojournalist during his early career, his work was published in a dozen languages across 20+ countries. He went on to edit or manage over 50 print publications, with target audiences ranging from pensioners to plumbers, many different sports, many car and motorcycle magazines, with many more in the fields of communication - narrow subject magazines on topics such as advertising, marketing, visual communications, design, presentation and direct marketing. Then came the internet and Mike managed internet projects for Australia's largest multimedia company, Telstra.com.au (Australia's largest Telco), Seek.com.au (Australia's largest employment site), top100.com.au, hitwise.com, and a dozen other internet start-ups before founding Gizmag in 2002. Now he writes and thinks.All articles by Mike Hanlon