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AT&T Reduces Your SMS Options
Eliminates $10, 1000 SMS Plan For New Users
by Karl Bode 06:16PM Thursday Aug 18 2011 Tipped by Rob See Profile
It appears that AT&T wants to gain a little more traction with the SMS cash cow, before SMS and MMS are put out to pasture with the rise of smartphones and push IM services. AT&T today confirmed they were eliminating their $10 a month 1000 text plan, leaving customers with the option of either paying $20 for unlimited text messages, or paying twenty cents per message (both directions). While this is obviously about pushing more users toward paying $20 for a service it costs AT&T virtually nothing to provide, AT&T claims they're simply "streamlining" their plans for new customers:
Starting August 21, we're streamlining our text messaging plans for new customers and will offer an unlimited plan for individuals for $20 per month and an unlimited plan for families of up to five lines for $30 per month. The vast majority of our messaging customers prefer unlimited plans and with text messaging growth stronger than ever, that number continues to climb among new customers. Existing customers don't have to change any messaging plan they have today, even when changing handsets."
With SMS and the idea of voice minutes dying (they're just data after all), carriers have responded by jacking up data prices, and now apparently by jacking up SMS prices as well. SMS is expected to be very profitable for some time, a recent study noting that carriers stand to make more money off of SMS in the next five years ($726 billion) than they have in the previous 15 years ($585 billion) since SMS arrived.

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New Castle, PA

2 recommendations

It comes down to what the market will bear

I often hear how something doesn't cost the provider anything to provide it, and I have to wonder, why does that matter? Trade is based on something people want and how much they're willing to pony up for it.

The market for sms or mms isn't based on what it costs a cell phone provider to deliver it; it's based on how much in demand those products are and for what price. It doesn't cost a music content provider but a penny or two in bandwidth to deliver an mp3 to me (if that, even), but if I want the song bad enough to pay $1.29 for it, then I'll pay for it.