2006/08/07

SMS is a false economy

Will someone please correct my logic here, if required.

SMS is the biggest scam in Africa. They are taking advantage of ill-informed
consumers, especially the poorest of the poor.

Networks are very busy convincing cell pone users to send SMS because:

1. It costs the network less than 5c to carry the message over the network,
but that same SMS cost the consumer between 40c and 75c, so SMS is far more
profitable for the network than carrying voice calls (which requires high
quality data signal traveling constantly in both directions to facilitate a
conversation).

2. Almost every SMS sent elicits a response, which results in a further
hundreds of percent profit for the networks each time.

3. If you need clarity on the cryptic SMS response you received to your
original message, it may cause you send yet another message, earning the
network another several hundred percent profit for your trouble.

4. Whereas if you make a phone call for between R1 and R3, in a minute you
can communicate more information back and forth more effectively and
accurately, in a single time-saving event.

5. If your network offers you free SMSes, don't bother to feel grateful. It
costs them just a few cents, but goes a long way to retaining you as a
customer, which is by far the most important business imperative.

6. As number portability comes ever closer, allowing people to keep their
cell number while switching freely between networks without incurring
significant penalties for doing so, expect to see the networks scrambling to
retain their customers. AND DON'T BE GRATEFUL IF YOUR NETWORK IS OFFERING
YOU SMS AT 23c. After all, they are only ripping you off to the tune of 400%
profit on that.

Well, that's my two cents worth, anyway. This email message cost less than
1c to send. ;->

Gavin

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