The Consumerist website has an article asking why text messages are so expensive and indicates that texts are about 4000% profit when compared with data rates in the U.S.
I have been saying this for years but the con trick is not only bad when compared to data services.
Since the advent of GSM in Europe or CDMA in the states, all communications by mobile phone have involved the transmission of digital data – normal voice communications use 9600 bits every second of the call.
When we use GSM data services to collect emails in those areas we are unable to achieve GPRS or higher, this is the reason it takes so long.
In the UK at least, the maximum length of a text message is 168 characters. That’s 1,176 bits of data (at 7-bit ASCII), add on a few bytes for handshake, addressing etc. you would still be pushed to make the total transfer larger than 3000 bits – or about a third of a seconds worth of data for the longest possible message (the average message is far shorter).

As an indication of how much we are ripped off lets look at the lowest O2 tariff (I am with O2) £20/Month – 100 inclusive minutes/400 texts

Text messages (over the 400) cost 12p each
Voice (over the 100 min) costs 20p/min or .4p/sec (rounded up)

These additional call and text costs are pretty much the same for all O2 tariffs.

A text message should therefore cost (rounding up) .2p each – charging 12p is at least a 60 times more expensive than voice (which is already priced to make a profit).

How can they persist in getting away with this? Well the mobile telephony marketplace is a more or less a cartel who have purchased from the government a licence to print money. This is combined with laziness and apathy on the part of the consumer.

The regulatory body that looks after the telecomms market have proven themselves to be completely unable of effecting real change, so there’s nothing that can be done apart from not using the service.

All the cell providers are as bad, the pricing on text services is indefensible and they are laughing at us all the way to the bank.

Edit: – my over zealous spell checker obviously thought I meant “indefeasible” when I said “indefensible”, which one reader took great delight in pointing out (thanks Matt.).