Con-Text

The phenomenal success of SMS text messages is a fascinating example of many things – the need for an asynchronous communications mechanism between humans, the surprising adoption of what was originally a test facility for engineers, the merits of enforced brevity in communications, and our voluntary blindness to some costs when they’re expressed in a certain way.

Let me explain that last point. Let’s say that a text message, once outside your allowance, costs you 7p, and that the average text is maybe 70 characters long, so a character costs you 0.1p. On this basis, a megabyte of data costs £1000. About $1600. (A little more, actually, since SMS characters are only 7-bits). Or, to put it another way: to send a floppy disk’s worth of data would probably cost you a lot more than the computer from which you sent it. To send an MP3 track would cost you about the same as a car. And in my case, if I happen to be in the States when I send a text, it costs seven times as much. Seven cars.

Now, you could argue that everybody gets lots of texts in their calling plan, which is of course true, at least in your home country – I never get close to exhausting my allowance – but it’s this theoretical underlying price that allows the networks to charge for this as a bonus. Suppose you pay £3 more per month for a plan that gives you 300 texts instead of 100 texts. It looks like a bargain – you’re getting those texts for just 1.5p each! That’s only £220 or so for a megabyte, or, in music terms, a thousand quid per track.

Now, if you have a smartphone, consider the data portion of your plan. I’m looking at two Vodafone SIM-only schemes here, and the only difference between them is 500MB of data per month. The price difference is £5 – i.e. one penny per megabyte.

This factor of twenty thousand in the two different ways of sending data, over the same network, from the same device, has always amazed me. There are lots of approximations in the above calculations, of course. You could point out that IP-based traffic has lots of overheads, which of course it does, for small amounts of data, but that’s mostly because we often see that data wrapped in a web page. I also assumed that people on average only type 10 words per text; if you always used your full 160 characters you’d save a fair amount per byte. So perhaps the true cost factor is more like 5000, or even 1000. But can you think of any other aspects of your life where choosing that alternative wouldn’t make you pause for thought?

Now, this only exists at all, of course, because in the past there was no choice. Phones were simple devices without a full IP software stack, they had small keyboards and limited ability to create or display any other kind of media. But once you had phones that could run apps like iMessage or WhatsApp, which could efficiently send messages using protocols of their own, the picture changed.

So it’s no surprise that a recent study suggests mobile operators lost $14bn last year because of such apps. It was only a matter of time.

5 Comments

Interesting!

It’s a network effect, innit? Metcalfe’s Law and all that.

At the moment, I can send an SMS to anyone with a phone, and anyone with a phone can send me an SMS, whether the phones in question are smart or dumb as a brick.* But iMessage only works between people who both have an iPhone/iPad upgraded to iOS 5. WhatsApp only works between people who have a smartphone and have that app installed. There’s loads of other possibilities too, from BlackBerry Messenger to dodgy looking apps in the murkier corners of the Android app world. That’s a very fragmented world.

At the moment, this network effect is powerful enough to justify the extra cost to most users, especially – as you very rightly point out – the cost is expressed per-message not per-megabyte and therefore (a) looks like a small number and (b) isn’t instantly comparable to data costs.

There’s a similar effect playing out with VOIP, too, and mobile carriers are (rightly) worried about it catching on.

It feels a bit like when the Internet and TCP/IP was taking over all networking in the 80s/early 90s. Only in reverse: back then we were rushing towards the benefit of a single network; now we’re being held back by the pull of such a network.

Things will continue to shift, I think, particularly as enterprises realise they can mandate a technology and save money (though this pushes against the BYOT trend). But I predict that SMS will remain significant until some other platform or internetworking technology achieves sufficient network scale.

* It fun to note that I can write off a technology that contains computing power vastly beyond that of anything available before the 1980s as ‘dumb as a brick’ without seeming obviously wrong.

Yes, you’re quite right, though email is probably as ubiquitous as SMS, and most of my friends have had email on their phones for a very long time now.

Part of this is that phones tend to treat the two differently. If I text someone, I can be reasonably sure it will pop up on their screen pretty quickly and make a beep. If I email them, it’s much less likely. I guess that’s what I’m paying for, but it’s a pretty artificial distinction. Perhaps we allow our phones to do this *because* the message has cost the sender something.

Now, what I really want, what I’ve always wanted, is an email address that costs the sender 1p per message…

I noticed that Apple snuck in iPhone to iPhone messaging that didn’t go over the SMS network in a recent release. I thought that was sneaky.

I have always thought that the email recipient should be able to set their own tariff which could be determined on a per sender basis. So, for example, you would initially charge £1 to receive all incoming emails. If you liked the email and/or the sender you would subsequently reduce the charge to 0. This would even work in a business context; if someone thinks it is worth my time to read an email they should be glad to pay £1 for me to read it.

It’s not a matter of $/byte, more a question of how much each person will pay per month. Speaking as the father of a teen who sends hundreds of the things every day the unlimited plan for $20/month is the right one for us!

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