Email is free. But SMS is not. Both are bits of data transmitted over a network. Both cost almost nothing to the networks. But then why is SMS so expensive? Greed of the carriers, that’s why. US has one of the highest SMS tariffs in the world. No wonder it is not as widely used as some other parts of the world.
SMS is a total rip off says Sam Diaz.
Everyone knows that movie popcorn is one of the biggest ripoffs, right? I mean, really, how much does it cost to pop enough popcorn to fill that $6 tub? It turns out that movie popcorn carries a 600 percent markup.
Ouch. And yet it’s not the biggest ripoff out there, according to a report by CNNMoney.com. The biggest ripoff, by far, with a 6,500 percent markup, is… the text message.
Text messages themselves, according to experts, are just tiny blips of data being transferred to and from mobile devices and don”t even cost the carriers a full penny to process. Computer scientist Srinivasan Keshav, who testified on the matter in Washington last summer, is quoted in the post as saying that it’s actually closer to about one-third of a cent to deliver.
I don’t like regulations and government interfrence. But this is one area of exception where I would like to see some govenment action. If the SMS costs come down we will see tremendous innovation in its use for personal and business communications. You see a lot of innovation in SMS in places like India. I would love to see that happen in the US too.
I am a big believer in the power of sms in reaching billions of people worldwide. This is very evident in countries like India. I am going all in on sms as a platform in India. Fred Wilson wrote a post on this topic. It is very reassuring to see visionaries like him think in similar terms as your vision.
There’s been a healthy debate of late about whether mobile apps are a long term business or whether web apps running on mobile devices will ultimately win out. It’s an important debate to have and while I favor mobile web apps, the current state of mobile technology and connectivity certainly favors the mobile app in the short term.
But lost in all of this debate is the least common denominator - sms (or texting as it is know in the mainstream).
I believe that Twitter’s native implementation of sms is an important part of its success. The 140 character limit was driven by the 160 character limit of sms and the initial design of the service put sms compatibility up there near or at the top of the system requirements. Other competitive services, including Facebook, are just not as natively available via sms the way Twitter is.
Of course most people access Twitter and Facebook and other web services via mobile web interfaces and apps. I don’t know the current percentages but I think something less than 15 percent of Twitter updates are posted via sms. And the number of people following via sms is also relatively low.
But I think it is critical, particularly early on in the commercialization of a mobile web service, for there to be an easy and quick sms interface. It allows potential users to see the value of the service without having to download anything. And it is always faster to shoot out a text message than load a mobile app or a mobile web page.
And the onboarding experience can also be easier via sms. Jack Dorsey, who built the first version of Twitter, showed me the easiest way to sign someone up for Twitter a few years ago. He said ‘when you want to get a friend on Twitter just tell them to send “follow fredwilson” to 40404′. For those of you who don’t know, 40404 is the Twitter shortcode in the US. I’ve used Jack’s approach dozens of times since then.