US Carriers Face An Expansive SMS Question: Why Double The Fee?
SMS bills managed to double over the last years and now the Senate Antitrust Subcommittee would like to know why. US carriers are currently silent.
September 11, 2008
“I am writing to express my concern regarding what appear to be sharply rising rates your companies have charged to wireless phone customers for text messaging. Some industry experts contend that these increased rates do not appear to be justified by any increases in the costs associated with text messaging services, but may instead be a reflection of a decrease in competition, and an increase in market power, among your four companies.”
“Also of concern is that it appears that each of companies has changed the price for text messaging at nearly the same time, with identical price increases. This conduct is hardly consistent with the vigorous price competition we hope to see in a competitive marketplace.”
The US senator points out that the cost for a consumer to send or receive a text message over each of your services has increased by 100% since 2005. The initial 10 cents per message per message is now history and has been replaced by all four carriers with a hefty 20 cents one.
As it follows, companies are required to provide the following data:
- the cost, technical, or “any other factors that justify a 100% increase in the cost of text messaging”
- data on the utilization of text messaging during 2005-2008 time period.
- a comparison of prices charged for text messaging as compared to other services offered
- an answer to the following: is their text messaging pricing structure differs in any significant respect from the pricing of your three main competitors?
The companies have until October 6 to answer.