When innovation doesn't reach the people...

06 Sep 2008

…you know something is wrong.

This is a rant I’ve been wanting to do for a long time. It costs cell phone operators practically nothing to deliver an SMS within their own network, and maybe a little to deliver it to another network - so why do they charge the end user so much? Would a broadband internet subscriber agree to paying 10 cents for transferring 160 bytes of data? That’s how much data is in a single SMS, and everytime you send one, your cellphone company enjoys profit margins of close to 98%.

We’ve got even better technology reaching the mobile market - 3G networks can offer data speeds of upto 7.2Mbits/sec (the theoritical limit is 14.4Mbits/sec). Combined with VOIP systems, that should mean cheap telephony and communication for everyone. It means you could reduce your mobile phone bills to 10% of what you’re paying now.

But no. You’re not allowed to use VOIP on your smartphone unless you’re in a WiFi hotspot. Why not? Because the cell phone operators don’t want you to - that would be bad for business wouldn’t it? I thought the whole point of technology was to make things cheap and easier for the end users. Apparently not.

This situation is a bit like when the old vinyl record companies tried to push back the compact disk revolution just because it would be “bad for business”. This is what happens when you put technology into the hands of giant corporates whose only reason to exist is profit. It’s like all the cell phone operators all over the world have an unspoken agreement to fleece the consumer collectively.

What we need is just one company to take a bold move forward by breaking this pact. It’s not like they have to invest huge amounts of money, the technology and infrastructure is here and now. Please, just charge the consumer how much it actually costs to make a call or send an SMS, with a reasonable profit margin. The rest will follow suit, as the free market dictates. That’s how the cell phone rates in India dropped drastically, and it’s our only ray of hope.

It’s not enough if we have open mobile phones, we need operators that are as honest and open as the handset. Communication simply doesn’t cost as much as the cell phone operators tell you it does, and it’s about time more people realized it.