"Consumers being 'abused' by text message price rort"

[MR CHILLED]

No surprises here really.....

"Consumers being 'abused' by text message price rort"

http://www.smh.com.au/technology/tec...0123-mroo.html

Australians are paying the highest prices in the world for text messages, industry experts say.

And texts cost the mobile networks practically nothing but earn them millions in profit each year.

Australians are expected to send 20 billion texts this year, more than 20 per cent higher than last year.

While the cost of mobile phone calls has declined in the past five years, the standard flat rate for a text message at Telstra and Optus has remained unchanged at 25 cents. At Vodafone, a text is 28 cents.

According to research done for The Sun-Herald, that is more than 10 times what it costs in many parts of Asia and almost a third higher than in Europe and Canada.

The Australian consumer is being "abused" by this text messaging pricing rort, said Allan Asher, chief executive of the Australian Communications Consumer Action Network, a new consumer body established by Federal Communications Minister Stephen Conroy.

"The mobile service providers are pricing texts at a vast profit margin and, sadly, it shows just how far from the competitive world market Australia is," he said. "We are being abused by the Australian telcos.

''Our service is among the worst in the world and our prices are among the highest. We are being taken for a ride by an industry that just doesn't care."

Last financial year, total mobile telecommunications revenue increased by 10 per cent from $10.8 billion to $12 billion, while mobile phone subscriptions increased to 24 million.

Consumer monitor Choice spokesman Christopher Zinn said the price of text messages would not come down until there was ''a proper competitive market with transparent pricing''.

Robin Braun, professor of Telecommunications Engineering at the University of Technology, Sydney, said that texts were a ''huge money spinner''.

The cost of texting on the GSM (2G) system was effectively free for the telecommunications companies, as they piggybacked on the management channel used for the operation of the network.

Texting was a cost for the 3G system but it was ''minuscule'', Professor Braun said.

The 25 cent cost of a text, for 160 bytes, means Optus and Telstra effectively charge $1560 per megabyte. If comparing with a $30 internet plan with a download limit of 10 gigabytes, the charge per megabyte is 0.3 cents, including free email.

There are several online companies in Australia offering cheap packages of text messages, often used by marketing companies. One Australian company, SMS Tech, resells bulk text packages for between 5 and 8 cents a text.

SMS Global resells text services at between 5 and 10 cents a message - for both local and international texts. The standard price for an international text at the major mobile services providers is 50 cents.

SMS Global director of marketing Paul McKenna said: "We came into the market with a belief that everyone is paying too much for SMS."

Australia's three mobile network carriers Telstra, Optus and Vodafone argue they are not charging 25 to 28 cents a text since most Australians sign up to a cap plan, whereby the user gets a certain number of calls and texts a month for a set amount of money.

Vodafone Australia spokesman Greg Spears said the company's $49 cap plan, for example, provided customers with $350 credit a month.

''If a customer used their entire $350 worth of credit exclusively for texts, that customer could send 1250 texts per month - so each text has actually cost less than 4 cents.''

However, Mr Spears conceded there was a need to be more transparent about costs to customers in the cap plans.

An Optus spokeswoman pointed to the Australian Communications and Media Authority Communications 2008-09 report, stating the average revenue generated per text message sent in Australia had declined, from 9.1 cents the previous year to 8.6 cents.

She also pointed to the range of Optus SMS packages such as one whereby customers could send 500 texts for $10 a month, which reduced the price of messages to 2 cents.

A spokesperson for Senator Conroy said: ''There is competition in the mobile phone market. Companies offer a range of different services. It is important that consumers shop around for the best deal.''

Telstra did not respond to a request for comment.

[TheChemist]

Realistically, this is part of free-competition, is it not? They set the price, and if we don't like it, we simply have the choice to not use them, correct?

It's not like SMS are a fundamental requirement of daily life, or anything.

[nexx]

Push email ftw

If only more of my friends used it.

[BuuBox]

This would have been a great article, about 10 years ago...

Cap plans, as convoluted as they are, make the $0.25 price of a SMS more or less irrelevant. In some countries, you also pay to receive SMS.

[TheWedgie]

BuuBox has a point - in Canada (and I assume therefore the US) you pay to receive both phone calls and SMS's...
I can see the carrier's response to complaints like this article being "sure we'll reduce your sms sending to 15c, but we'll now charge you 10c to receive one".

[Philll]

+1 Push email

[Copie]

Meh, just get a work paid phone, doesnt cost you anything then.

[SaTaN]

Originally Posted by TheWedgie

BuuBox has a point - in Canada (and I assume therefore the US) you pay to receive both phone calls and SMS's...
I can see the carrier's response to complaints like this article being "sure we'll reduce your sms sending to 15c, but we'll now charge you 10c to receive one".

yep, 10c to seed and receive sms, AND not everyone has sms enabled which makes it bloody annoying. you also pay to receive calls, so yeah, .au isnt that bad compared.

[chip]

Originally Posted by TheChemist

Realistically, this is part of free-competition, is it not? They set the price, and if we don't like it, we simply have the choice to not use them, correct?

it's not really free competition when every supplier charges the same grossly inflated cost. That's more like a price fixing cartel.

In North America mobiloe telcos charge for 'airtime', which is used up when you're sending or receiving calls. If you think Australian telcos are a rip-off, try living in Canada

[stroggos2k]

I get my sms for free on Optus?

[iNoob]

Fb, private message ftw lol.

[SaTaN]

Originally Posted by iNoob

Fb, private message ftw lol.

google voice.. free sms and calls FTW! oh right, us only (2c /min to .au though which is fan fucking tastic!)

[power]

text was great when it first started, hardly anyone used it and it was only $5 a month for unlimited text. (Telstra)

The network limitation didn't bother me either.

[figrin]

Originally Posted by chip

In North America mobiloe telcos charge for 'airtime', which is used up when you're sending or receiving calls. If you think Australian telcos are a rip-off, try living in Canada

Yeah I have. Monthly service connection fee, emergency 911 fee. I remember my $20 monthly plan came to $36 after all the fee and taxes.

But this study compared Australian prepaid plans with no loyalty discount vs others. AFAIK prepaid is non-existent in North America. If you are a frequent SMS user and paying 25c you are an idiot, telco should have the right to charge you $1 for being one.

[MR CHILLED]

Originally Posted by power

text was great when it first started, hardly anyone used it and it was only $5 a month for unlimited text. (Telstra)

True to form and like anything else, as soon as it gets popular up goes the price.