Why America Does Not Use SMS

June 17, 2007

We work with people all over the world and we have heard it said many times that it is very strange that people in the United States do not generally use SMS. It is true that Americans use SMS far less than people in other countries. Why? Because the mobile operators in the United States discourage the use of SMS through their pricing structures. To get a mobile phone in the United States and get a reasonable price, one must buy a package "plan". This plan often includes a certain number of minutes each month, such as 1100 minutes. If one does not use the allotted, the user effectively loses them. So, users are encouraged to use the purchased minutes. (This is true even for the so-called "roll-over" plans which enable one to retain minutes for a period of time generally less than 12 months.)

SMS messages are an additional cost on top of the purchased mobile plan. Unless a special "text message" option is added to the plan, most users must pay about 15 cents per message to send an SMS message (AT&T's present rate). Clearly, if one sends a lot of messages, then a "text messaging" plan is necessary. Even so, 15 cents per transmitted message is probably not considered too bad. However, mobile operators in the United States do not stop there. They also charge 15 cents for each message that is received by the user! So, if User A sends User B a message and User B replies, each user will have to pay 30 cents for the text message exchange. If one just places a 1-minutes phone call, the cost is far less.

So, you can see why text messaging in the United States is not widely used.

About a year ago, the text messages were 10 cents and to see those prices increase seem to make absolutely no sense. We just received news from AT&T this week that the price for sending a text message to an international destination is increasing from 20 cents to 25 cents. Long Live Skype!