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The True Bandwidth Cost Of SMS
Nice profit margin you've got there...
by Karl Bode 09:41AM Tuesday Jan 29 2008
Last summer a website sat down and compared how much you pay for SMS compared to actual cost of bandwidth used, and the results were fairly absurd. With AT&T increasing the cost of text and pic messaging to 20 and 30 cents a piece respectively, the a gthing science project blog does a follow up on what these transfers actually cost AT&T. Given the standard SMS message contains up to 140 bytes, the user does the math and concludes that to send 2560 songs via his ISP would cost him $1, while it would cost $61,356,851.20 to send them via SMS.

This is of course incorporating the fact that both the sender and receiver of the SMS are charged. But what does it cost AT&T to send SMS? One Slashdot poster argues that for AT&T, the marginal cost of an SMS is $0.
As a matter of fact SMS messages are sent on the control channel. Initially SMS were implemented in the GSM standard as a control system, just like the ICMP protocol of the IP stack. Then NOKIA though to implement a actual instant message function using SMS. The Contol channel is the channel that your mobile listens to in order to receive calls. So for receiving a SMS a control signal is sent. Since bandwidht is somehow limited on these channels it could happen that in a situation of massive usage of texting the control channel gets saturated and normal voice protocol initiation is disrupted. To prevent this carriers nowadays apply a kind of QoS delaying SMSs until there is no risk of congestion. So we can state that the marginal cost is 0 and the cost/opportunity is also 0.
Of course while the profit margins here border on criminal, consumers still continue to pay.

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