Is Text Messaging a Rip-Off?

Making the rounds today: A University of Leicester scientist estimates that the cost of sending a text message is over four times the price of downloading data from the fancy Hubble Space Telescope.

Nigel Bannister calculates that sending one megabyte's worth of text messages would cost $734. The same amount of data would run about $166 per megabyte for Hubble.

But there is potentially a big problem with Bannister's calculation for those of us in the U.S. He assumes that the average price charged for sending a text message is roughly $0.10. This may very well be the case in the United Kingdom, but it's a different story over here.

If you sign up for your wireless provider's text messaging plan, as most heavy users of texting are likely to do, the price per message comes down dramatically.

For example, T-Mobile charges $4.99 per month for 400 messages, Nextel $5.00 for 300, and AT&T $5.00 for 200. That averages out to a little under $0.02 per message. While most users aren't going to use up all of those messages each month (driving up the average cost), the plans all allow for sending data-heavy pictures and video at no extra charge (driving down cost).

At $0.02 per message the cost of sending a megabyte's worth of text messages is closer to $150, lower than Bannister's calculation for Hubble transmissions. Still, even though his metric for how expensive texting is for the average user doesn't seem to work for the U.S., the main question still remains: Is texting a rip-off?

Last year, BusinessWeek estimated that profit margins for data services are in the 75 to 90 percent range. Couple that with the fact that you can send texts for free on the web, and you can see why data was one of the few bright spots in Sprint's weak earnings announcement today.

(Credit: NASA/Roger Ressmeyer/CORBIS)

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