Why SMS Message Prices Are Going Up?

-

Sprint that started it all

First it was Sprint increased the SMS messaging price to 15 cents per message for all subscribers that haven't bought a SMS Messaging bundle plan. Effective from 21st of Jan, 2007 Cingular customers also must pay 15 cents per Message unless they subscribe to one of the messaging bundles. Now its turn of Verizon to follow the suit. Effective 1st of March, 2007 Verizon customers, unless subscribe to a messaging package, must pay 15 cents per message.

 Verizon's Notice of Text Messaging Increase:

Notice of Text Messaging Increase, which only applies to customers without a Messaging Package.
If you are not currently subscribed to a Messaging Package, beginning March 1, 2007, the price for sending TXT Messages to the U.S., Puerto Rico, Canada and Mexico - as well as the price for receiving TXT Messages from anywhere - will increase from $0.10 to $0.15 per message. The price to send an International TXT Message will remain $0.25 per message. If you do subscribe to a Messaging Package, your package rates will stay the same. Please consult your Customer Agreement for information about rate changes.

Source: Legal Notice - Notice of Text Messaging Increase

Key Reasons Why Carriers Are Increasing SMS Pricing

  1. With the decline in Voice Revenues, Carriers are making desperate attempts to earn their revenues on Data, for which there is no competition from Internet companies like Skype. This could act as a key differentiator and strategic advantage.
  2. To Force Subscribers buy Message/Multimedia Bundles with hope that customer's reliance on Multimedia/data/internet usage can turn customers Loyal to the carriers and stick to them. Particularly avert threats from VOIP/Internet based companies.
  3. Profits on Data Services are significantly Higher than Voice services. 
  4. Customers using Data Services is a key and warm up to introduce new Networks and Applications that rely on Data Networks, which bring more revenue to the carriers.

For a good analysis of How US carriers are doing in terms of Data Services, have a look at a report from Chetan Sharma Consulting, a Mobile Consulting and Advisory firm.

Can I Terminate my Contract without paying Early Termination Fee due to this hike?

Some discussions and blogs said that You Could. But based on my understanding, You Can not. There were instances it seems some people cancelled contract but got away without paying the Early Termination Fee. But since SMS is not part of the Plan that a typical customer is subscribed to and its a pay-per-use for SMS, it will not be considered as a hike in price. But if you are quite unhappy with Cingular and hope that some other carrier is better than Cingular, you might give it a try.

Comments

Post a Comment

Popular posts from this blog

Newsworthy News in Red October : Dow Jones & Tax Dodgers

-
Dow Jones Index crosses the symbolic 10000 figure. U.S. stocks rallied, sending the Dow Jones Industrial Average above 10,000 for the first time in a year, on better-than-estimated earnings at JPMorgan Chase & Co. and Intel Corp. Bank of America Corp., American Express Co. and JPMorgan more than doubled since the Dow slid to a 12-year low on March 9 as global financial firms began recovering from $1.6 trillion in writedowns and credit losses. International Business Machines Corp. and Hewlett-Packard Co. jumped at least 54 percent since March 9 on signs the nation was recovering from the worst recession in seven decades. Source: Bloomberg And, about 7500 International Tax dodgers file for IRS Amnesty to avoid jail Some 7,500 international tax dodgers have applied for an amnesty program that promises no jail time and reduced penalties for tax cheats who come forward, the Internal Revenue Service announced Wednesday. … The program is part of a larger eff...
Read more

USCIS Selects Final H1B Petitions by Random Selection - Almost a 50% chance for each Application

-
U.S. Citizenship and Immigration Services (USCIS) announced today that on April 12 it conducted the computer-generated random selection process to determine which H-1B petitions, subject to the congressionally mandated H-1B cap for fiscal year 2008 (FY 2008), would continue to final processing. USCIS completed this determination ahead of the preliminary schedule noted on April 3, when it announced it had received enough petitions to meet the cap for FY 2008. The 123,480 cap-subject petitions received on April 2 and 3 were labeled with unique numerical identifiers and selected randomly by computer. The chosen numerical identifiers were then transmitted to the appropriate service center for further processing. Source: USCIS Announcement Number 123,480 looks a lot better keeping in view initial estimates. A good 50% chance for each application to be selected.  Update: 3rd May 2007 Hello friends, I understand your anxiety. But don’t loose your hope and/or temper yet. Please wai...
Read more

H1B 2008:USCIS released Preliminary Numbers

-
USCIS today released the final count of number of unique pieces of mail received for H1B petitions. It received 133,000 unique pieces of mail containing H-1B petitions. I guess, each piece of mail will ' mostly ' contain more than one petition, as no company would send each petition in a seperate package and its most unlikely that a firm applies for just one petition. Probably by the end of next week, we might know the actual number of H1B petitions filed and how lucky one must be to get through the initial filter. Source: USCIS Releases Preliminary Number of FY 2008 H-1B Cap Filings  (26KB PDF) 04/05/2007 During Monday and Tuesday, USCIS received 133,000 unique pieces of mail containing H-1B petitions. This is lower that the original USCIS estimate of 150,000. USCIS based the initial estimate on amounts from manifests received along with the mail. USCIS reached the updated number following a physical count of the mail. Each piece of mail may contain more than one H-1B pe...
Read more