Ten things wrong with US wireless service (Part II)
We discussed the top 10 reasons why wireless service in the United States is not among the world’s best. Let us discuss the 4th reason which is all about the huge and effortless sums of money wireless service providers make.
Money for nothing-Have you ever heard of the helpful computerized female voice when voice-mailing someone? All 4 providers play similar sounding prompts saying something like “Record your message after the beep. You may hang up when you have finished recording” The voice prompt is about 15 seconds long.
A major provider like Verizon, who has about 70 million customers, is estimated to earn at least $620 million a year extending your minutes just by playing those 15 second long instructions. Not only is this practice tiring, it is such a waste of time. Fortunately there is a way to cut short the helpful voice prompt but the catch is, it differs among the 4 major service providers.
This technique is used by all 4 major providers to maximize customer’s airtime. It is one of the ways cell phone companies optimize Average Revenue Per User (ARPU). Company growth derived from maximized returns from each user is preferable to company growth based on widening the user base because there are no costs involved in building additional infrastructure.
The price of text – SMS is a basic feature of cellular systems. It has been there longer than mobile internet, mobile video and other mobile enhancements. The technology of sending SMS hasn’t changed since digital cellular networks started replacing analog technology. For most carriers, the cost of sending SMS across the network has been the same or even went down.
There is no reason for SMS charges to go up but it just did. It has been calculated that it takes wireless providers 1 cent to deliver SMS but current charges in the US is about 20 cents, double than what is was three years ago.
What is the most probable reason for the doubling of SMS charges? It’s a come-on for users to switch to the unlimited bundle package which is an additional 20 dollars extra in fees per month.
There is a huge amount of money in the SMS market. The Gartner Group estimates that 3.3 trillion messages will be sent this year. Last year, 2.5 trillion messages were relayed, up by 32 percent from 2007. With this amount of money, it is no wonder then that the 4 major wireless providers simply connived with each other and raised the price of text messaging at the same time period.
I pay and you pay-When you make a call over the landline, the telephone conversation is charged to your account. This is also true for wireless calls in other countries but not in the US. Most Europeans would find it strange that the caller and the recipient are charged for the minutes spent talking on the phone.
Another strange practice of wireless providers in the USA is that the sender and receiver of SMS both pay for the cost of delivery for the message.