According to research done for The Sun-Herald newspaper in Australia, consumers are paying the highest prices in the world for text messages, reportedly more than 10 times what it costs in many parts of Asia and almost a third higher than in Europe and Canada.
An article in a sister publication went on to point out that texts cost the mobile networks practically nothing but earn them millions in profit each year. Â These are not the sort of headlines the telco industry likes to see.
It went on to use a very strange collaborating argument that even though the cost of mobile phone calls has declined in the past five years, the standard flat rate for a text message at Telstra and SingTel Optus has remained unchanged at AU25 cents (US23 cents) and at Vodafone, a text is AU28 cents (US25 cents).
Chief executive of the Australian Communications Consumer Action Network (a new consumer body established by Federal Communications Minister Stephen Conroy), Allen Asher was â€˜slightlyâ€™ evocative by claiming the Aussie consumer was being â€œabusedâ€.
“The mobile service providers are pricing texts at a vast profit margin and, sadly, it shows just how far from the competitive world market Australia is,” he said. “We are being abused by the Australian telcos.Â Our service is among the worst in the world and our prices are among the highest. We are being taken for a ride by an industry that just doesn’t care.”
More fuel was added to the fire with the statement that the 25 cent cost of a text, for 160 bytes, means Optus and Telstra effectively charge AU$1,560 per megabyte. If comparing with a AU$30 internet plan with a download limit of 10 gigabytes, the charge per megabyte is 0.3 cents, including free email.
A Vodafone spokesman defended his companyâ€™s SMS charges by pointing out under capped plans the actual cost of SMS can be as low as 4 cents. Â An Optus spokesperson pointed to the range of Optus SMS packages such as one whereby customers could send 500 texts for AU$10 a month, which reduced the price of messages to AU2 cents.
Whilst this may be true, the average consumer cannot make head or tail of complex and often bewildering tariff plans that package voice and SMS together. Â Transparency in pricing is becoming a real issue in some markets and may be required to avoid negative press like this recurring.