As if the economy wasn’t enough a problem, now, after it was uncovered that SMS text messaging was a no cost option for cellular providers, and we have been paying for something that is 100% profitable for them, information has been released stating that the rates are going up.

from BetaNews

At the CTIA Wireless show in Las Vegas today, the Mobile Entertainment Forum (MEF) will unveil survey results around the financial impact of a proposed hike in fees for text messaging services in the US.

Although the costs might ultimately be passed on to consumers, the tariffs will start to be imposed this spring by mobile carriers. Those affected will include content publishers, service providers, and aggregators.

While more widely used in Europe, SMS text messaging services have already seen some adoption in the US, for ads and marketing campaigns along with content. Although not an MEF member, The New York Times is now texting breaking news and authors’ columns to mobile device users on an on demand basis, for example.

In the MEF survey results released today, mobile carriers said that a tariff of between $15 and $20 CPM (cost-per-thousand page impressions) — amounting to between 1.5 and 2 cents per minute of SMS messaging — would be enough to cover their costs for provisioning text messaging services.

In contrast, members in the service provider, content publisher, and aggregator categories said that a “sustainable” surcharge for their text messaging services would need to be much lower, in the range of $2.50 CPM and $4.29 CPM. They also indicated that they could only afford a cost of between $5.00 and $6.49 CPM.

In a statement, Jim Beddows, chair of MEF Americas, contended that if the tariff for text messaging services is set too high, service providers might eliminate planned text messaging campaigns, thereby “effectively reducing” the use of wireless data services in the US.

Conversely, Gary Schwartz, CEO of aggregator Impact Mobile, urged MEF members to agree on a tariff of $10 CPM (or 1 cent per minute), so as to “sustain a business model” for text messaging content services in the US and “keep the SMS ecosystem vibrant.”

Impact Mobile provides a mobile messaging platform used by clients such as the Live Nation concert tickets Web site.

More than a dozen mobile operators belong to the global MEF organization, including US operators AT&T and Sprint, as well as German-based T-Mobile, which also runs T-Mobile USA. Verizon Wireless does not appear on the membership roster on the MEF’s Web site. Content publishers on the MEF’s membership list produce content such as games, electronic greeting cards, and online magazines. Members include Sharpcards and National Geographic.

While it can be said that the providers are the ones with the equipment, and that customers could not send the messages otherwise, it shows that providers have no clue about the bad taste it leaves in many mouths when something like this is flaunted in front of the paying public.

In a world where speaking delivers much more information than those 140-or-less character compositions, I have never understood why texting is so popular. But I also am not a big phone talker. Those who need the SMS texting should search and obtain the best plan now, before the rate hikes take place.


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