Monday, January 12, 2009

The Cost of SMS in Canada

Below is a copy of an E-mail I sent to Mr Jesse Brown who host the CBC podcast Search Engine:
http://www.cbc.ca/searchengine/

The topic was SMS pricing. (Show for 2009-01-12) I checked to see how much we were really paying for SMS compared to talking... my math says 500times... at minimum..

Can you check and tell me if I'm right?


All of the Telephone based information is based on the Creative Common Licensed book "Asterisk, The future of telephony", available at http://oreilly.com/catalog/9780596510480/ , just click the Online book for the entire PDF


Traditional telephone is 8bit sampling 8000 times per seconds, making traditional telephone 64kilobits per seconds. (or 8 kilobytes per second)Codecs might bring this down to anything between 8kbps and 15.2kbps.

One minute of talk can be anything between 480000bytes (at 64kbps) and 60000bytes (at 8kbps). This is, of course, low quality voice talk because a comparable MP3 file of the same length would be around 1024kilobytes (1MB). Let's just use the lower end for comparison.

To get a rough idea of pricing, let's take a talk plan that gives a 400 minutes for 40$. At that price, the cost of talking for 1 minute of talk (if you use all your available minutes) is 40$ / 400 minutes = 0.1$/m

So with 0.1$/m and 60000bytes/m talk costs around:
0.1/60000 = 0.000001667$/byte
or
0.000001667$/byte * (1024*1024) = 1.747626667$ per Megabytes at the low end.

SMS is, by comparison,very small. 140 Characters in 8bit mode or 160 characters in 7 bits encoding, making the content of the message only 140bytes. The overhead of such message makes the entire message under 200bytes, but let's use 200 bytes for comparison.

At 0.15$ per SMS, it cost:
0.15/200 = 0.00075
or
0.00075$/byte * (1024*1024) = 786.43$ per megabytes...

so it's around 500 times more expensive to send SMS at the base price, then to talk on my phone.

An equivalent price for SMS to be billed like talk would be:
0.000001667$/byte * 200 bytes/SMS = 0.00033$/SMS
or
0.33$ per 1000 messages...

Quite a difference, don't you think?

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