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The recent announcement in the state of the Nation address (SONA) of
the promotional prices of P0.50 per text makes us wonder what is the
real cost of sending a message via SMS (or the short messaging
system). If companies can still make a profit at 50 centavos then
why were the telcos charging us for more before the announcement?
Let us make a back-of-the-envelope estimate of
the cost of sending data through the cell phone network. Let us
start with the basics. SMS or popularly known as text is sent
through the airwaves as data packets similar to the Internet that we
are all familiar with. There are several ways to send this data over
the cellular network.
SMS was inherent in the design of the GSM
(Global System for Mobile communications) network but is now carried
over even in the newer 3G networks. For internet rates, either
through 3G or through GPRS (General packet radio service), telcos
currently charge a flat rate of approximately P10 per half an hour
for data transfer.
At GPRS data rates, typically at 56 to 114
kilobits per second, which means that at its slowest speed, it can
send out the whole of Noli Me Tangere in around three minutes. At
P10 for half an hour, sending the whole of Noli would cost around a
little bit less than P1.
The whole work of Dr. Jose Rizal contains around
1.15 million characters while a single text message contains only
160 characters.
This means that to send one text message costs
around one hundredth (0.01) of a centavo! Even if you factor in for
administrative costs, we would end up way below the fifty centavos
that we have right now.
At slower GSM rates, the cost of sending a text
would still be a fraction of a centavo. Using faster networks like
the 3G would bring down this cost even further.
We should probably ask for refunds since
apparently the telcos can still make a hefty profit at half a peso
per message when it really only costs a fraction of a centavo to
send a text. The National Telecommunication Commission and the
Bureau of Internal Revenue should work together to find out how much
the telcos and the government owe the consumers and to find out the
quickest and most fair way of undertaking a refund. The government
should also bring back the Value Added Tax (VAT) it collected in
these overpriced texting rates that we were paying and work to push
down further the costs of texting.
Inherent, integral function
It has been argued that since SMS is an inherent
and integral function in the design of the GSM system and its
successors, it should have been given free as part of the use of the
network. Telcos did not add anything to their towers to enable SMS,
it was there in the system to start with. But even if we grant the
claim of the telcos that SMS is a value added service, then the
telcos should be able to tell us how much it costs to maintain the
service since the Public Telecommunications Act of 1995 requires
them to maintain separate books of accounts for these value added
services.
The claim of government in reducing texting
rates becomes suspect since SMS/text was one of their target for new
government taxes. For several years, the finance department, upon
the urging of the International Monetary Fund, wanted to impose
“sin” taxes on text. It stopped only when texters, led by the
consumer group TXTPower, revolted (through texting of course) and
sent a barrage of protest messages to top government officials. Had
it pushed through, text messages would have cost P1.50, with P0.50
going to the government.
Instead of riding on promotional rates by the
telcos, the government should institute a way to provide permanent
lower rates for voice, texting and even the internet. Aside from the
costs of texting, we should also note that there are still the
perennial complaints of “lost” load, intermittent service and
coverage, as well as text spam and messages that hound the texting
public.
4,500 times overpriced
Yet despite these concerns, SMS has grown to be
very popular not only in the Philippines, the erstwhile texting
capital of the world, but is used across more than 200 countries by
over three billion people in 2007.
The popularity of SMS only reflects our need to
communicate with each other and texting provides one of the cheapest
way to do that (although at current rates, its around 4,500 times
overpriced!). We communicate through text with our family members
working abroad or in the provinces, transact business, join games or
send messages to our loved ones. It is thus important to keep
texting genuinely affordable and accessible to all.
prom.bound@gmail.com
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