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[GIZ] AT&T’s New Text Plan Overcharges You by 10,000,000 Percent. - Page 13

post #121 of 136
FYI, AT&T's total revenues were $124B, and net income was $20B. That's only a 16% profit margin, which really isn't a whole lot. They couldn't drop their prices more than 5% or so without risking net losses. In fact, if they gave free texting to everyone, they'd probably have to increase the price of their other services to avoid a loss. So yes, texting prices are insane, but the revenues on texting services help subsidize other pricing, such as the base price for phone services.

Source
post #122 of 136
Quote:
Originally Posted by redsunx View Post
$25 a month for a 2GB plan ain't nothin. Neither is 20 bucks a month for texting. If you had a full time job, it would take you about two hours to get that paid off in a day. If you're complaining about something like that; don't have a cellphone or sort your life out.
Even though one has money, it doesn't mean one wants to give a big portion of said money to something like text messaging. I, and a ton of other people don't value text messaging worth $20 a month, or $0.20 a text. Its outrageous. Most carriers force you have some sort of text messaging plan these days. If you don't want to pay the $20 a month for text messaging, you will still have the feature, just if you send one out, or receive one, its gonna cost you a ridiculous $0.20 a text.

Plus if you have that mentality, it all adds up. Oh, $70 for internet? That's not much. Now add in electric, natural gas, water, food, gas, phone, cell, television and other random monthly bills, it comes out to be quite a lot of money. A good portion of your money going, in today's society, essential things.
post #123 of 136
Quote:
Originally Posted by SgtSpike View Post
FYI, AT&T's total revenues were $124B, and net income was $20B. That's only a 16% profit margin, which really isn't a whole lot. They couldn't drop their prices more than 5% or so without risking net losses. In fact, if they gave free texting to everyone, they'd probably have to increase the price of their other services to avoid a loss. So yes, texting prices are insane, but the revenues on texting services help subsidize other pricing, such as the base price for phone services.

Source
That's not the Wireless subsidiary that we're talking about, that's the entire corporation. Get their balance sheets, look at the patterns (not just the numbers), and compare them to Verizon. You can't just look at GPM and determine how well a company is doing off of that.
post #124 of 136
They make much more money selling the service than they do selling the access to the service. That is the single fact at the root of usage based billing and the need for network neutrality. With such a high barrier to entry this isn't a market being fully serviced by competition. We need new service providers to increase competition otherwise you need regulation.
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post #125 of 136
Quote:
Originally Posted by quentin View Post
That's not the Wireless subsidiary that we're talking about, that's the entire corporation. Get their balance sheets, look at the patterns (not just the numbers), and compare them to Verizon. You can't just look at GPM and determine how well a company is doing off of that.
So? If they need the wireless subsidiary to subsidize some of their other activities, so be it. My point is, they aren't just ripping everybody off - they have costs and expenses to pay, and they have to find a way to pay for them. If people are stupid enough to pay for text messaging, well, that's their own problem.

FYI, Verizon's profit margin was a bit less, around 10% IIRC. Similar looking income statement. And I don't know what you would plan on telling by comparing the balance sheets... the health of the companies maybe? But that's largely irrelevant to our discussion anyway.

Quote:
Originally Posted by Mygaffer View Post
They make much more money selling the service than they do selling the access to the service. That is the single fact at the root of usage based billing and the need for network neutrality. With such a high barrier to entry this isn't a market being fully serviced by competition. We need new service providers to increase competition otherwise you need regulation.
It's a high barrier to entry because it COSTS A LOT OF MONEY TO PUT UP CELL TOWERS. It's not free. They need to charge high prices to pay for their expenses. If someone could do it better, they would, and AT&T would have a lot higher profit margin than just 16%. And there's lots of competition - I mean, how many cell towers do you expect companies to put up? One in each person's backyard, so we can have hundreds of wireless carriers? Just about anywhere you live, you have access to 4-5 major wireless networks, and many more small-time outfits with low prices.

You get what you pay for in wireless service. There's a lot of very cheap phone services, like Cricket or Virgin, but people instead choose to let phone companies rape their wallets, then sit back and QQ about it as if there's nothing they can do. But the fact of the matter is, the major carriers are major for a reason - they actually have coverage and infrastructure to back up their prices. If you want to pay less, you'll have to deal with less coverage and less infrastructure. The cheap carriers are out there, and the choice is yours.

Heck, you could probably go out and find wireless phone service for $20/month. Why aren't you using that again? Oh, because it doesn't have very good coverage? And why might that be? Oh, because they don't charge very much for their phone service, thus cannot support hundreds of billions of dollars in infrastructure to give you better coverage?

I'm not trying to argue that text messaging isn't overpriced for what it is - it is extremely overpriced, and I will never pay for it unless I have a lot more disposable income than I do now. But people have to understand that if they decrease the price of those text messages, they'll have to increase the price of something else to compensate in order to pay their bills.

If you don't like it, don't text, or find a different freaking cell service.
post #126 of 136
I wish companies would go to data only. It would free up the signal range that voice/texting uses, making the usable data range larger and more reliable, and I imagine it would decrease cost to put up a new tower, and since they would get rid of phone servers it would decrease maintenance.
Charge everyone a flat 40bucks and see the customers flock in.
But whatever, I truly hate this cell phone bill nonsense. I only have one cause you need a phone number to get a job and maintain life. Last month I probably used 20mins.
Really thinking about doing a pay as you go, like 1000mins and have it last all year long.
    
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post #127 of 136
Quote:
Originally Posted by SgtSpike View Post
So? If they need the wireless subsidiary to subsidize some of their other activities, so be it. My point is, they aren't just ripping everybody off - they have costs and expenses to pay, and they have to find a way to pay for them.
My point is, you're looking at the larger corporation instead of the much more successful wireless subsidiary. AT&T isn't struggling to rub two nickels together for heat, as you're portraying.

I don't understand what numbers you're using, and where you're getting them, and whether you're using the wireless companies or the parent companies.

Quote:
If people are stupid enough to pay for text messaging, well, that's their own problem.
Airtight argument. I wonder why companies with anti-trust suits haven't used this one...

Quote:
Originally Posted by SgtSpike View Post
FYI, Verizon's profit margin was a bit less, around 10% IIRC. Similar looking income statement. And I don't know what you would plan on telling by comparing the balance sheets... the health of the companies maybe? But that's largely irrelevant to our discussion anyway.
What? That's entirely what are discussion stems from. AT&T and the gang find any way possible to stiff the customer. Some of their services are clearly price-fixed for no other reason than to make even more profit. 155 bytes of data for 20 cents a pop? Visual Voicemail for 2.99 more month? How does a company calculate and report their expenses for wireless tethering? Does the development of the app equate to the $20 a month? Show me where in the expenses is the cost justified.

Quote:
Originally Posted by SgtSpike View Post
If you don't like it, don't text, or find a different freaking cell service.
Oligopoly
post #128 of 136
I was just going to say "well they have to make a profit somehow" but this is ridiculous. If I ran a phone network company thing I would charge 50%-100% more than what it actually costs to send a text.
    
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post #129 of 136
Quote:
Originally Posted by SgtSpike View Post
It's a high barrier to entry because it COSTS A LOT OF MONEY TO PUT UP CELL TOWERS. It's not free. They need to charge high prices to pay for their expenses. If someone could do it better, they would, and AT&T would have a lot higher profit margin than just 16%. And there's lots of competition - I mean, how many cell towers do you expect companies to put up? One in each person's backyard, so we can have hundreds of wireless carriers? Just about anywhere you live, you have access to 4-5 major wireless networks, and many more small-time outfits with low prices.

Heck, you could probably go out and find wireless phone service for $20/month. Why aren't you using that again? Oh, because it doesn't have very good coverage? And why might that be? Oh, because they don't charge very much for their phone service, thus cannot support hundreds of billions of dollars in infrastructure to give you better coverage?

If you don't like it, don't text, or find a different freaking cell service.
Yes, that's true, if you don't like it, you don't NEED to use texts--still doesn't make the cost fair.

But to chime in on the "it's expensive to put up cell towers" argument, why did AT&T make claims that it would be too expensive to roll out added coverage (plus 4G coverage) to more areas of the population (approx. $3.5B total) and they couldn't afford to do that, but then they immediately turned around and were more than willing to spend TEN TIMES that amount to buy out one of their competitors? They are not hurting for money. IMHO, a track record of successive record profit recordings coupled with a coincidental increase in fees and services says something is wrong. While entire company expenses are shared to a point, one cannot justify senseless charges for one business segment just to recoup the costs of another business segment, especially when those senseless charges for services have done nothing but increase. It's true, companies rarely pass down the actual cost to operate to the customers on a service-by-service basis (for example, it might cost the company more to support data, but less to support SMS, so they weigh their costs to the customer such that one service isn't unrealistically high, while another is unrealistically low). But if that's the case, why do fees increase despite (virtually) no advancement in the technology? The bottom-line for SMS messages have increased despite the fact that we've been on the same towers for quite some time. It doesn't cost more and more to support already-installed towers, so why the continual increase in fees (and also a continual decrease in tolerated data usage)?

I'm one of the people that jumped ship to virgin mobile, mainly because in 95% of the places I go, the coverage is identical. But it's not as good, and there are times I miss the AT&T coverage. And VM doesn't seem to have a shred of customer service (though luckily I haven't needed to use them). And while it is only $25 for 300 minutes (and unlimited data and texts), and that while I'm not cheap, and affording an AT&T plan is not a problem, I am happier to not support the shady business practices that AT&T uses for their mobile business segment. One can only say "that's fine, just don't use it" up until a point. AT&T has only gotten back to the size they were before the large break up a few decades ago. And while I hope I'm exaggerating (and not predicting the future), what's next, paying $30/mo for text messages?
    
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post #130 of 136
Dont tell me americans never paid for a single SMS?? Here every single SMS is charged.
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