Tag Archives: costs


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.

© Copyright Quentin Stafford-Fraser