The real cost of sms bandwidth: Rs.83886.08 per Gigabyte

Posted: February 10, 2011 in Uncategorized
The real cost of sms bandwidth: Rs.83886.08 per Gigabyte

When developers started marketing cellphone services, did they ever think that the real money spinner would be the humble sms service?

Let’s have a closer look on how much do we pay for 1GB of sms. Telenor offers 700 sms’ for Rs.8 for a week. It means price of a single sms is 0.011  (8/700)  paisa, looks quite cheap? Lets examine more.

A standard SMS message contains up to 140 bytes (1120 bits) of data – this takes care of the 160 characters allowed in your text message. This might not make sense at first, until you realize that SMS uses 7 – not 8 – bit characters – leaving you with 128 possible character values instead of the normal 256. So 1120bits/7bits = 160 characters.

So our total message length is about a tenth of a kilobyte (.13671875 Kbytes). That gives us 7 messages on a kilobyte. There is 1024 kilobytes on a Megabyte that gives us 7168 messages on a megabyte. Again there is 1024 megabytes in a Gigabyte that gives us 7340032 messages on a gigabyte. Our sms’s will then cost us Rs.83886.08 per Gigabyte.

Big questions asked:

Why are we being ripped of by the cell phone providers? the argument in favour of the data providers usually alludes to the costs of maintaining the network, but here are the facts:

The marginal cost of a SMS is 0. SMS messages are sent on the control channel. Initially SMS were implemented in the GSM standard as a control system, just like the ICMP protocol of the IP stack. Then NOKIA though to implement a actual instant message function using SMS. The Contol channel is the channel that your mobile listens to in order to receive calls. So for receiving a SMS a control signal is sent. Since bandwidht is somehow limited on these channels it could happen that in a situation of massive usage of texting the control channel gets saturated and normal voice protocol initiation is disrupted. To prevent this carriers nowadays apply a kind of QoS delaying SMSs until there is no risk of congestion. So we can state that the marginal cost is 0 and the cost/opportunity is also 0.

There is a case for opportunity cost, where a provider charges a premium for the opportunity of making our lives easier, and that is true for a sms. I’m surely not advocating that there should not be any premium for the cellphone providers given the nature of the sms, I’m just asking for a fair price. That is all.

The article has been re- written considering the sms price in Pakistan.



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