Recently Cingular and Sprint announced they were raising the cost of a txt message sent through their network to $.15 each. Today Verizon announced the same increase. This change will affect postpaid customers who do not have a texting package. According to the notice on Verizon Wireless’ Web site announcing the price changes, the carrier offers messaging bundles starting at $5 per month for 250 text, picture or video messages. However, visitors shopping through the carrier’s Web site can only select messaging options starting from $10 per month.
Mobile messaging is a major revenue source for carriers around the world. Today, messaging and other data services typically contribute around 15 percent of an operator’s revenues, with the majority (typically 90 percent) of those revenues arising from SMS. Emerging technologies such as instant messaging (IM) are still only a small slice of the revenue pie. Fueled by rapid adoption in the U.S., and mature but expanding markets in Europe and Asia, the mobile messaging industry is set to nearly double from $68 billion in 2006 to $117 billion in 2010, according to analyst firm Informa Telecoms & Media.
For the consumer though $.15 is a steep price to pay for one message containing maximum 160 characters – especially when Text messages usually consists of much shorter notes like “c u l8r” and ‘lol!.’ With more than a trillion text messages sent annually, the actual cost to deliver and manage an individual message is minuscule so $.15 a pop is a huge price to pay. It appears the carriers’ goal is to present the larger per unit fees in an effort to drive their customers to buy a package of messages creating a steady monthly annuity with hefty profits.
Updated January 8, 2008: Verizon increased text messaging rates to $.20 each today in an effort to push the higher value bundles. See more at RCR Wireless
