Verizon Wireless Massively Raises Rates For Text Messaging Services

from the margins?--you-have-no-margins? dept

It's no surprise that some things may be getting more expensive these days, especially as companies start dealing with the fallout from the financial crisis -- but it appears that some are going a bit overboard. There's a bit of an uproar among some, as Verizon Wireless is slapping a surprising 3-cents-per-text-message fee on top of every mobile terminated text message. That basically affects any company that provides some sort of SMS notification system or content service, massively increasing prices. As some have noted, most of those services bought text messages in bulk, where it cost around 1 cent per message. That means the cost of sending text messages just quadrupled. If you're already worried about the economy and working on tight margins, that could certainly put some companies out of business entirely.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
    identicon
    some old guy, Oct 10th, 2008 @ 3:10pm

    speaking of margins

    whats the margins on texting right now, before the rate hike? about 99.9% profit? So this raises it to... 99.999% profit?

    Now if only they could achieve 5 9s of RELIABILITY, not 5 9s of GOUGING.

     

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  2.  
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    Lucretious, Oct 10th, 2008 @ 3:11pm

    This is exactly why I don't bother with anything other than pay-as-you-go phones. For the monthly rates charged, Verizon should be including it as a freebie. Christ, how much does it cost to send a few bits of text info over the system?

     

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  3.  
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    CVPunk, Oct 10th, 2008 @ 3:35pm

    Re:

    apparently now it is .03 for each msg.

     

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  4.  
    identicon
    Michael B, Oct 10th, 2008 @ 3:50pm

    Ah, Gordon Gekko is Right After All!

    "Greed is Good". At least Gordon Gekko in the movie "Wall Street" thinks so... so, evidently, do the Verizon folks. After all, "It's the network", and anything you can do to increase profit with no bottom-line cost increase is, well, good. It's not like their network costs have risen becaue of fuel costs or raw material price increases.

    Just another company out to screw their customers.

     

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  5.  
    identicon
    Dan, Oct 10th, 2008 @ 3:56pm

    Re: speaking of margins

    You can make over 100% profit.

     

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  6.  
    identicon
    Anonymous Coward, Oct 10th, 2008 @ 4:00pm

    solution: Don't use text messages!
    DUH!

     

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  7.  
    identicon
    some old guy, Oct 10th, 2008 @ 4:11pm

    Re: Re: speaking of margins

    Not in the correct usage of the term as it relates to margins.

     

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  8.  
    identicon
    Mireah, Oct 10th, 2008 @ 4:38pm

    Re: Solutions!

    "solution: Don't use text messages! DUH!" Don't use cellphone, they're not a necessity anyway (but are convenient, but at what cost will they become toys only for the rich?) $100 a month to carry a phone at all times...its stupid. Fine for using a cellphone while driving...(should be) priceless! (or greater than $500)

     

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  9.  
    identicon
    Thomas, Oct 10th, 2008 @ 4:56pm

    only companies?

    It sounds like it doesn't add to the cost if you are sending a txt message from 1 cell to another, just companies that send mass. Shouldn't that be cheaper? I guess they are really finding out that it's very popular, so why not charge more?

     

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  10.  
    identicon
    Rob Friedman, Oct 10th, 2008 @ 5:01pm

    AT&T raising too!

    AT&T sent me a "FREE" TXT the other day saying that on 2008.11.12 the Text/IM rate will increase from $.15 to $.20 per message sent or received. While their package rates will remain the same.

    This is just an effort to sell packages. What gives I went prepaid to get away from packages. It makes me want to use Text even less, and pisses me off more when I receive them from Random people. At least I can choose to ignore a wrong number if someone is calling me.

     

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  11.  
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    Stuart, Oct 10th, 2008 @ 5:31pm

    Re:

    It looks like the cost assuming that each message is the full 160 characters is around $200,000.00 per Gig.

     

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  12.  
    identicon
    Sam I Am, Oct 10th, 2008 @ 6:06pm

    SPAM

    Verizon raises their rates, that is their prerogative.
    However, to charge for incoming SPAM which is not within the users control, is unconscionable. It is possibly criminal if they are also selling your cell phone number to the spammers.

     

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  13.  
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    Steve, Oct 10th, 2008 @ 7:03pm

    Not Quadrupled

    1 to 3 is Tippled

     

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  14.  
    identicon
    freediverx, Oct 10th, 2008 @ 7:31pm

    Re:

    No, the solution is to switch to another service provider.

     

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  15.  
    identicon
    Anonymous Coward, Oct 10th, 2008 @ 7:38pm

    yes Quadrupled

    Steve,

    1 plus 3 is 4. The rate went up 3 cents. 4 is one quadrupled. Stop with the George W Bush math.

     

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  16.  
    identicon
    Anonymous Coward, Oct 10th, 2008 @ 8:08pm

    Re: Re: (Stuart - $200,000.00 per gig)

    Good Call, Stuart.

    Let's look at competitive technologies:
    "At 10 cents each that's $776.50 per megabyte, or about 4.4 times more expensive than the 'most pessimistic' estimate for Hubble Space Telescope transmission costs."

    Dr Bannister was informed by Nasa that it costs $18.30 per megabyte for the transmission of data from Hubble to the Earth.


    Source:
    http://www.itnews.com.au/News/76011,sending-sms-costs-four-times-more-than-receiv ing-data-from-hubble.aspx

     

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  17.  
    identicon
    Emilio, Oct 11th, 2008 @ 5:35am

    Of course, we adults can make decisions like "Don't text, it's too expensive", or "Switch to a less expensive carrier", but the massive number of school kids this fee is really targeting don't care how much their folks have to fork over to Verizon each month. And of course, since NOTHING is more important to parents than their precious, spoiled little brats, they'll go right on forking over the money (they so hate hearing the brats whining about anything, after all...)

     

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  18.  
    identicon
    j, Oct 11th, 2008 @ 6:05am

    Re:

     

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  19.  
    identicon
    Jack_Frost, Oct 11th, 2008 @ 7:32am

    Crooks

    The crooks have sifted to the surface.

    And they are coming out in all segments of the business world. Here I thought AT&T were the worst of the bunch, but now Verizon is proving to be as much of a violator. They go on my list of cell providers I won't consider after my contract is up with AT&T.

     

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  20.  
    identicon
    Jeff L, Oct 11th, 2008 @ 9:08am

    Let's get the facts straight

    First, this isn't Verizon charging more to individual consumers, at least not directly. This is Verizon charging application providers (like CNN sending breaking news alerts) $.03/ message.

    Let's remember that many municipalities and other first responder agencies use SMS as one of their communication channels for urgent/time sensitive alerts. Verizon's move (especially if it is echoed by other carriers), makes it untenable for those critical services to be offered.

    Also, you should note that Verizon announced on 10/11 that this policy (which they officially announced was in effect starting 11/1) was actually just floated to 'stimulate discussion among their business partners'. Such a crock!

    If Verizon's position on this creates a problem for you, make your voice heard so that the 'stimulated discussion' doesn't end up resulting in anything like a $.03/message charge.

     

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  21.  
    identicon
    Since when ?, Oct 11th, 2008 @ 12:48pm

    SMS is reliable ?

    "many municipalities and other first responder agencies use SMS as one of their communication channels for urgent/time sensitive alerts."

    Is this a good idea ?
    How reliable is SMS ?

     

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  22.  
    identicon
    Anonymous Coward, Oct 11th, 2008 @ 10:13pm

    Re: SMS is reliable ?

    Agreed. So maybe I'll just SMS my local 9-1-1 instead of just calling calling 9-1-1 because some Oracle named Jeff L came from the sky and said so.

    Now, before you just laugh and brush it off, understand your exact proposed worst case situation happened to me.

    If I would have pulled off on the other side of the road, I would have enjoyed the services of a Fire department 2 blocks from me, and it's quite possible my insurance company wouldn't have had to total my car for fire damage. But, because I decided to pull over and not block traffic, being the kind citizen I am, the other fire department was 4 miles away, and the car literally exploded before they could show up.

    I ended up doing quite well, actually on the total payout of my car putting me ahead, but still. You have a great idea! I wonder how this would work with SMS.

    Would I have had the fire department 2 blocks away showed up?

     

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  23.  
    identicon
    Jeff L, Oct 12th, 2008 @ 5:14am

    You've missed my point

    I'm not referring to an individual sending an SMS to 911, I'm referring to municipalities sending text messages to residents when major events (such as fires, street closings, subway outages, etc) take place. At a federal level, we see the same thing. For example, Homeland Security communicates via SMS (among other channels) with air marshals.

    Any serious municipality will also use other communication channels (email, phone, web), because SMS is not always perfectly reliable. It is however, a very effective way of providing timely information to a large number of people in a small amount of time.

    Beyond municipalities, many people receive lots of other types of important information via SMS. Weather from the weather channel, stock quotes and news from CNN, etc. These services are untenable as well under this proposed pricing.

     

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  24.  
    identicon
    Anonymous Coward, Oct 12th, 2008 @ 7:00am

    Re: Re: Re: (Stuart - $200,000.00 per gig)

    So what you are really saying is that this pricing scheme is far above astronomical in its profit /cost ratio ?

     

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  25.  
    identicon
    Rob, Oct 12th, 2008 @ 7:08am

    Guess what, it's a phone, use it to call people. Texting is stupid, sp. those people that text and drive

     

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  26.  
    identicon
    Ads that you pay to see, Oct 12th, 2008 @ 7:15am

    Re: You've missed my point

    "municipalities sending text messages to residents when major events (such as fires, street closings, subway outages, etc)"

    and who pays for the SMS ?

    I read recently that CA is considering ads on the highway overhead displays. Would they extend their ads to this also ?

    I can see it now ...
    Attn: accident ahead, expect delays. Uh oh better get maaco

     

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  27.  
    identicon
    Verizon User, Oct 12th, 2008 @ 7:41am

    My wife and I have been on Verizon for years and would never switch. They have by far the best coverage. But, the text charge is certainly gouging at it's finest.

    We pay a lot for our "unlimited text" package but it's well worth it for all of the other very cool features that come with it including the Navagation feature. The Nav feature is almost indispensible.

    Overpriced? Yes! Gouging on texting? Heck yes! It can't cost anything really to send a few bits of data through the system... But if you want the big features, your gonna pay for it month by month. And pay, and pay...........

     

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  28.  
    identicon
    Ed Franco, Oct 12th, 2008 @ 12:29pm

    NO WAY WILL I PAY. Sprint offers a Simply Everything plan 4 $99.00

    I will not pay for more Verizon greed. They are one of the most expensive cell phone carriers on the market. They claim it's because they have the best network (I don't think so).

    I'Ve posted a link where you can research dead zones for all carriers.
    Verizon has the most complaints see for your self and judge.

    (The red ones are on Verizon's Network)

    http://www.deadcellzones.com/

     

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  29.  
    identicon
    Bob Bent, Oct 12th, 2008 @ 1:43pm

    Text Message Rate Hike

    Most mobile marketing programs will now have to block Verizon customers. If the other companies raise their rates accordingly, it puts a serious crimp on an emerging industry.

     

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  30.  
    identicon
    CharlieBlix, Oct 12th, 2008 @ 10:11pm

    Twitter?

    So what does this mean if I have my Twitters sent to my phone. I pay for unlimited texting but since the twitters are coming from an online site and not another phone will I be charged for each twitter I get on my phone? God I hope not.

     

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  31.  
    identicon
    Twinrova, Oct 13th, 2008 @ 3:53am

    You all sound surprised.

    You shouldn't be. With all these phone companies sleeping together, Verizon's just taking a step in which the others will eventually do as well (should the increase happen).

    Our contract with Verizon is up in 2 months, and after that, we're done with cellphone companies who do nothing but destroy the foundations on what got them popular to begin with.

    Hell, you can't even find a plan for $39.99 anymore. Gone. Poof. Add all this "extra" stuff they charge for and it's no wonder they've fallen out of the COMMUNICATION business and have entered a PLATFORM business.

    Screw this. It's just another prime example of big business changing the rules as they see fit, screwing its customers. This blog points out the customer isn't just "Joe and Jolene America", but small business as well.

    Until consumers fight back, get ready for a whole new set of rule changes coming. Think SMS message increases is the last?

    Just wait.

     

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  32.  
    identicon
    Anonymous Coward, Oct 13th, 2008 @ 7:04am

    Texting has become the communication standard for those under 25, many of them send literally hundreds of text messages every day. I have seen usuage rates as high as 15,000 per month for a single phone (and that person wasnt even using the automated services others have mentioned). I have heard stories of people having more than 30,000 in a single month. Even if you assumed an average of only 20 text messages/day per phone, that is an enormous amount of traffic.

    I know it's popular to side with the consumer and "stick it to the man". But companies can only raise prices as high as the market will tolerate. As price increases demand decreases and this is true for B2B transactions as well as consumer transactions (arguably even moreso).

    For example at this point Verizon is making money from Google for SMS messages, but if the rate increase is more than Google is willing to pay Verizon could actually decrease its revenue. If the market isn't willing to pay the price Verizon will relent and adjust the price lower.

    Verizon has an obligation to its stake-holders to maximize earnings. They are attempting to increase profits by raising the rates paid by services as opposed to charging customers more.

     

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  33.  
    identicon
    USCellularFan, Oct 13th, 2008 @ 8:00am

    Now I'm switching to USCellular for good!

     

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  34.  
    identicon
    Yakko Warner, Oct 13th, 2008 @ 10:02am

    Re: Re: Re: Re: (Stuart - $200,000.00 per gig)

    From http://www.quotationspage.com/quote/26930.html

    There are 10^11 stars in the galaxy. That used to be a huge number. But it's only a hundred billion. It's less than the national deficit! We used to call them astronomical numbers. Now we should call them economical numbers.
    —Richard Feynman (1918 - 1988)

    Yep, the pricing scheme is far above astronomical; it's economical. ;)

     

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  35.  
    identicon
    Yakko Warner, Oct 13th, 2008 @ 10:06am

    Re: Re:

    Which one?

    We have a pretty good family plan with T-Mobile. Two lines, $50/month, 400 shared minutes per month that we never come close to using up. Of course, they just raised their rates to 20¢ per text message sent or received (40¢, then, if we send a message to each other, since we get charged on both sides). So we go with option A: no text messages, thank you.

     

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  36.  
    identicon
    Kathy Canavan, Oct 13th, 2008 @ 1:22pm

    Don't deal with Verizon. They tell you one thing and then charge you another thing. I just wasted an hour on the phone with them trying to straighten out a charge their store employees (2) both told me I wouldn't be charged.

     

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  37.  
    identicon
    CMRSlawyer, Oct 16th, 2008 @ 1:38pm

    Texting rates

    A lot of comments seem to misinterpret the article. Unless I'm mistaken, the rate hike is on companies that use SMS for notification or content services, NOT on subscribers' texting. They are making it more expensive for those businesses to text you, not for you to text your buddies.

     

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  38.  
    identicon
    anonymous, Oct 16th, 2008 @ 4:26pm

    Re: Re: You've missed my point

    actually, those types of texts are free--to verizon wireless customers, anyways.

     

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  39.  
    identicon
    bob, Dec 1st, 2008 @ 2:30pm

    text fees

    I find it interesting you mouth off about verizon while they sponsor your site/blog

     

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  40.  
    identicon
    money, Feb 10th, 2009 @ 9:24am

    ugly

    u have got to create a new phone with better service

     

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  41.  
    identicon
    Anonymous Coward, Jun 29th, 2009 @ 10:47pm

    Re: yes Quadrupled

    It beats the hell out of the Barrack Obama math.

     

    reply to this | link to this | view in thread ]


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