Cell-Phone Bills: Is Text-Messaging Too Expensive?

Texting isn't just a hot medium; it's also a big eyesore on many cell-phone bills. Even so, carriers fear that their fat texting profits will soon disappear. TIME reports.

... Wireless channels contribute about a tenth of a cent to a carrier's cost, that accounting charges might be twice that and that other costs basically round to zero because texting requires so little of a mobile network's infrastructure. Summing up, Srinivasan Keshav, a professor at the University of Waterloo in Ontario and an expert on mobile computing found that a text message doesn't cost providers more than 0.3 cent.

You don't have to be a Wall Street analyst to do the quick math: with a carrier cost of one-third of a penny, when a customer pays 15 cents to send a message, 98% of that 15 cents is pure profit.

Read full article.

Related:

-- Text-message fees recommended for antitrust scrutiny

-- Lawmakers Question Increased Text Messaging Costs

Mobile roaming charges drop across Europe

Mobile phone charges will fall for millions of holidaymakers across Europe from today, after new regulations come into force to drive down the cost of roaming. The Guardian reports.

The changes – which were originally approved in 2007 – are an attempt by officials to end what they have called excessive charges.

"The roaming rip-off is now coming to an end," said EU telecommunications commissioner Viviane Reding in a statement. "Expect the new roaming rules to make it much cheaper to surf the web on your mobile while abroad in the EU."

Examples of specific costs are available at the European Commission's website.

Text-message fees recommended for antitrust scrutiny

The chairman of a Senate panel on antitrust issues last Tuesday called on the Federal Communications Commission and the Justice Department to scrutinize competitiveness in the cellphone industry, pointing to a 100% increase in some text messaging charges by four companies that control most of the market. The LA Times reports.

Sen. Herb Kohl (D-Wisconsin) said that from 2006 to 2008, the price charged by the four biggest carriers for sending and receiving such messages rose from 10 cents to 20 cents.

And the increases seemed to occur in "lock step" -- first from 10 cents to 15 cents and then from 15 cents to 20 cents, with each set of increases occurring within a period of months or even weeks, said Kohl, chairman of the Senate Judiciary Committee's subcommittee on antitrust, competition policy and consumer rights.

"Are these price increases the result of a lack of competition in a highly concentrated market?" Kohl asked.

Read full article.

Previously: - Lawmakers Question Increased Text Messaging Costs

Lawmakers Question Increased Text Messaging Costs

Lawmakers on Capitol Hill are questioning cell phone carriers about the increasing costs of texting. Democratic Wisconsin Sen. Herb Kohl is among the group asking questions, reports ABCwisn.

"From 2006 to 2008 for the four major carriers the price has increased by 100 percent from 10 to 20 cents a message," said Kohl.

Text messaging uses less bandwidth than almost any other service on a wireless network. Lawmakers want to know why the increase in use of texting has seen a corresponding increase in rates.

Several dozen class-action lawsuits have been filed against wireless carriers.

The suits allege the companies conspired to "fix prices" for text messages, which the companies vehemently deny.

The consumer mark-up on some text messages is an estimated 4,900 per cent, according to a leading Canadian computer scientist who testified before U.S. senators on Tuesday. The maximum cost of a single text message "very unlikely" exceeds 0.3 cents, reports Canada.com.

Syrians Boycott Mobile Phones in Protest

Syrian subscribers are fed up with the high costs of running a mobile device in their country. The protest is aimed at knocking down prices to price-points comparable to other countries in the region. Facebook and Twitter were used to help spread the campaign message.

[via IntoMobile]

Vodafone UK to Offer Borderless Roaming this Summer

Vodafone UK has announced that it is abolishing roaming charges between June and August this year - allowing calls made and SMS/MMS's sent from 43 countries (and 2 UK territories) to be charged at the same rate as their home tariff. Nice.

[via CellularNews]

EU Moves to Cut Mobile Phone Termination Rates

The European Commission launched a new assault on what it considers to be rip-off costs in mobile telephony Thursday, this time setting its sights on mobile termination rates. IDG News reports.

Termination rates are the wholesale fees phone operators charge each other for connecting a call to its network. The fees are then passed on to consumers but they are invisible.

Unlike roaming rates, this ripoff is not obvious to consumers because it is built into charges that operators offer to consumers...

EU assembly adopts new price curbs on phone calls

Using a mobile phone to send text messages or surf the Web by laptop will be up to 60 percent cheaper for travelers in the European Union under price curbs adopted by the European Parliament on Wednesday, reports Reuters.

Operators will be allowed to charge customers a maximum of 11 euro cents (14 U.S. cents) per roamed text (SMS) message, excluding sales tax, compared with current prices of about 28 cents.

European Travelers to Get Cheaper Text Messages

European travelers will pay less to send text messages under a deal agreed to by EU negotiators. Mobiledia reports.

The negotiators from the European Parliament and 27 member states called for a maximum price of 11 cents for text messages sent while abroad in the European Union, much lower than the current EU average of 29 cents which is almost 10 times the cost of sending an SMS at home.

In some countries the price of sending a roaming text message is as high as 80 cents.

EU nations also agreed to new cuts in mobile phone calls seeking to lower tariffs gradually to a ceiling of 35 cents (47 US cents) a minute for roaming calls from 2011.

The current maximum cost for such a call is 45 cents a minute but should drop to 43 cents in July.

Also from this summer, mobile telephone operators will have to charge by the second, rather than rounding up to the nearest minute. They will however be allowed to charge for 30 seconds for any very short call.

European Lawmakers Vote To Cap Roamed SMS Charges, Data Downloads; Differences Remain

The European Parliament's Industry Committee voted on Monday to reduce the charges for sending text messages and for downloading data while consumers are roaming outside of their home country, a move that could pave the way for the lower costs starting July 1.

[via The Washington Post]

Europe Nears Price Cap on Mobile Text Messaging

European Union telecommunications ministers are set to endorse on Thursday proposed price limits on cross-border text messaging and mobile Web surfing, according to a copy of the plan obtained by The International Herald Tribune.

[via The New York Times]

Lawyers suing wireless carriers over SMS rates

Shortly after Sen. Herb Kohl asked wireless carriers to justify rising SMS prices, lawyers began filing antitrust suits, RCR Wireless News reports via The Dallas Morning News.

"The wireless industry trade magazine uncovered five suits in just the first few days after Kohl began asking carriers why they've doubled the price of text messages over the past few years.

Text messages, when paid for individually, generally cost about 20 cents apiece these days -- even though many analysts think they cost carriers well under a penny to deliver. High profit margins aren't illegal, of course, but when all the companies in an industry hike the price of a service that's only getting cheaper to provide, people start thinking about collusion and antitrust suits.

RCR thinks the lawyers smell blood and expects them to pool their resources into a massive class action.

... Americans currently send about 75 billion text messages a month, so SMS is clearly a big revenue and profit generator for the wireless industry. Carriers generate about $28 billion a year in data revenue, which includes SMS. "

Text-Messaging Rates Come Under Scrutiny

The top four wireless providers in the U.S. are being asked by a senior senator to account for their text-messaging prices, reports the WSJ.

"Sen. Herb Kohl (D., Wis.), who is chairman of the Senate Judiciary Antitrust Subcommittee, sent letters Tuesday to Verizon Wireless, AT&T Inc., Sprint-Nextel Corp., and T-Mobile USA, noting that text-messaging prices have increased 100% since 2005.

"What is particularly alarming about this industrywide rate increase is that it does not appear to be justified by rising costs in delivering text messages," Sen. Kohl's letter said.

Mr. Kohl's letter noted that each company appears to have changed text-messaging rates at nearly the same time, with identical prices. "

EU to cut SMS Roaming Fees by more than 60%

European Union regulators proposed cutting mobile phone text-messaging fees charged when customers travel abroad by more than 60 percent. Bloomberg reports.

"The European Commission will propose that the retail charges for SMS should be capped at 11 euro cents ($0.16), down from an average price of 29 euro cents in the 27- member EU, according to a document obtained by Bloomberg News. Wholesale charges will be capped at 4 cents, the document said. "

Aussie watchdog sniffs at mobile data fees

The rise of fast web browsing on 3G mobiles such as the iPhone has prompted Australia's competition regulator to investigate whether carriers are misleading consumers into a trap of high excess data usage fees.

[via stuff.co.nz]

EU's Reding seeks to slash cost of text roaming

"Rip off" mobile phone operators will be forced to slash by roughly two-thirds the cost of text messages for people travelling between European Union countries, the European Union bloc's executive arm said on Tuesday, reports Reuters.

"The 2.5 billion text messages sent every year by roaming customers in the EU cost more than 10 times more than domestic short messages (SMS), EU Telecoms Commissioner Viviane Reding said in a statement.

"EU citizens should be free to text across borders without being ripped off," she said.

Mobile firms hit roaming deadline

Mobile phone firms have reached a deadline to cut the price customers are charged for sending text messages in member countries of the European Union, reports the BBC.

EU plans new push to cut mobile charges

The European Commission plans to use new administrative powers to push national regulators to lower the fees that mobile operators can charge each other to connect calls between their networks. Much of the savings would be passed on to consumers.

[via IHT]

EU suggesting mobile phone users should pay to receive calls

European Union telecoms chief Viviane Reding has angered consumers after suggesting mobile phone users should pay to receive calls as well as make them, writes the Daily Mail.

"Despite previous moves to reduce high costs for mobile phone users, the Telecoms Commissioner has done an apparent u-turn by suggesting she would propose that Europeans pay to receive calls - a common practice in the United States, China and Singapore.

Ms Reding is also seeking to reduce the cost of text messaging for Europeans while they are abroad from their home country."

Warning over EU roaming charges

The European Union's telecoms chief has threatened to introduce measures slashing the costs of cross-border text-messaging if operators do not lower prices voluntarily by July 1. The Press Association reports.

"EU Telecoms Commissioner Viviane Reding insisted the costs of SMS and data roaming were too high and opaque and must come down because consumers are being ripped off.

Costs people pay for making mobile phone calls outside their home countries have dropped by up to 60% since the European Commission capped fees last September.

But the price cap does not cover mobile internet or some 200 billion text messages that are sent a year in western Europe."

Costs of Text Messaging vs. Space Transmissions

This is one of the stranger assumptions made about text messaging pricing. Via the NY Times The Lede Blog.

"Nigel Bannister, a space scientist at the University of Leicester in Britain, has concluded that sending a text message costs at least four times as much as transmitting scientific data from the Hubble telescope."

Dr Nigel Bannister’s calculations were used for the Channel 4 Dispatches program “The Mobile Phone Rip-Off”.

He worked out the cost of obtaining a megabyte of data from Hubble – and compared that with the 5p cost of sending a text.

He said: “The bottom line is texting is at least 4 times more expensive than transmitting data from Hubble, and is likely to be substantially more than that.

EU regulator threatens to go public with cellphone companies' fees

The European telecommunications regulator plans to name and shame operators that do not cut prices for roaming text messaging and wholesale data transmission by July 1. The IHT reports.

"I will look at all the tariffs available and put them on a Web site," the regulator, Viviane Reding, said Thursday in Paris. "That way, people will be able to see which ones have not lowered their prices."

Reding, the EU telecommunications commissioner, said she would submit regulation that could come into effect as early as the end of this year to ensure operators heeded her demands."

EU in new assault on 'rip-off' mobile phone charges

The European Union set mobile phone companies a July deadline on Monday to cut their roaming charges for text messages and Internet use or face regulation.

[via AFP]

EU sounds new alarm about mobile phone bills

Mobile phone users in Europe are often billed 20 percent more than the actual time of their calls because they are charged by the minute - even if they talk only 20 seconds, the European Commission said Thursday. The AFP reports.

Mobile operators to challenge law

The UK's four leading mobile operators were given clearance yesterday to take a challenge over the EU roaming law to the European Court of Justice.

02, Vodafone, Orange and T-Mobile allege that Viviane Reding, European commissioner for telecoms, had no legal right to introduce the law, which forced the operators to cut the charges they impose on customers for calls outside their home countries.

A London high court judge agreed to refer the issue to the European court of justice.

[via the FT]

New EU rules to slash mobile phone calls abroad come into force

New rules aimed at slashing the price of mobile phone calls made abroad in the European Union come into effect this week, with EU regulators promising Monday to name and shame non-compliant companies. [via the AFP]

" Mobile phone operators had until midnight Monday to offer the new so-called roaming rates and by September 1 must bring them into effect whether customers request them or not.

An EU commission spokesman said that the mobile phone operators who did not offer the new rates would be named and shamed."

EU regulators drop mobile phone probe

The European Commission said Wednesday it had dropped its antitrust investigation into mobile phone roaming prices charged by operators in Britain and Germany after new EU rules forcing telecom companies to cut the cost of using mobile phones abroad. [From the Associated Press]

EU To Monitor Cellphone Bills For Abuses In Roaming Rules

The European Commission said Monday that it will monitor the cost of mobile phone use over the next 18 months to ensure operators don't unfairly raise fees to compensate for the price ceiling on international roaming calls, set to come into force this summer.

The commission also threatened to fix ceilings for the prices charged for using cross-border data networks unless operators slash their fees.

The commission will "continue to monitor prices, in particular for SMS and data roaming, to make sure consumers do not suffer in other ways," said E.U. Telecommunications Commissioner Viviane Reding, who has championed the price ceilings. "I hope that operators now understand the E.U.'s ability to act. My message to them: Move now and bring down SMS and data roaming charges down quickly, or we will be forced to also intervene there very shortly." Yay!

27 European Countries Approve Cell Phone Roaming Cap

The European Union governments approved a cap on cell phone roaming fees this week, but the move isn't likely to have much if any impact on U.S. cell phone callers traveling in European this summer. TechWeb reports.

"Approved Thursday, the new cap is scheduled to take effect in European countries in August. Rates will be capped at 66 cents a minute for outgoing calls and 33 cents a minute for incoming calls. The lid on roaming fees drops prices drastically and service providers have complained about the action.

The cap is not expected to impact roaming prices for U.S. travelers.

"Although this is great news for Europeans, the legislation does not protect foreign travelers with North American-based carriers," said a spokeswoman for Brightroam,"

EU parliament approves plans to slash roaming rates

The European Parliament adopted on Wednesday measures slashing so-called roaming rates by as much as 70 percent, a decision likely to cut the cost of cross-border mobile phone calls in coming months. [via the AFP]

Welcoming the vote, EU Telecommunications Commissioner Viviane Reding said: "This means that already from this summer, mobile phone customers will start benefiting from substantially reduced roaming charges when travelling from one EU country to another.

"Europe's internal market will finally become truly borderless, even for mobile phone bills,"she added.