Analysts, such as Professor Srinivasan Keshav at the University of Waterloo, suggest that people who
send text messages may be succumbing to carriers charging up to 4,000 percent more than the true worth of a text. However, the rise of free messaging services may cause carriers to rethink their exorbitant pricing strategies.
'It's something like a 4,090 percent markup,' says Keshav, in regards with the ten to twenty cent charge that carriers charge each time customers send text messages. The professor
estimates that carriers pay about a third of a penny to send a text message over existing cellular networks.
Free message services, such as Apple's iMessage, BlackBerry Messenger, and Facebook Messenger are increasingly on the rise as customers find a way around one of many ways carriers make money off of high priced, low bandwidth services.
'There's a huge amount at stake here. [Wireless carriers] are undermining the core business model for an industry that makes most of its money from services that are high priced and low bandwidth, like texting,' said
Bernstein Research analyst Craig Moffett.
Moffett also found customers who send text messages through Verizon allow the carrier to benefit from more than ten percent of its total revenue through texts alone. In the US, people who send text messages contribute to more than two trillion texts each year, generating $20 billion for wireless carriers.
Standalone messaging apps such as WhatsApp and Kik and social media services such as Twitter offer free solutions for those who send text messages and are tired of paying for ridiculous carrier fees. These services allow for much more than the traditional text; group chats, sending photos and video, and cross-platform functionality on top of free usage are amongst the perks offered by messaging apps.
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