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Re: [PLUG] [OT] NYTimes article: What Carriers Arent Eager to Tell You About Texting
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I make my living helping companies convert to "Lean Manufacturing" (see my
website http://www.Bralla.com for info on Lean).
One of the truisms in modern manufacturing is that we have to lower costs to
improve profits, since we generally can't raise prices, since prices are set
by the market.
This has enormous influences in how you quote the price of a product, and how
much profit you make.
The old way to determine the selling price of a product: (Cost to provide
the product or service) + (Desired profit) = (Selling price)
Today's way: (Price) - (Cost) = (Profit)
Markets set prices. Producers either sell at the market price, or don't sell
at all. If they can make money at the market price, they will. If there's
lots of money to be made at the market price, then lots of people will figure
out how to enter the market to get some of the big profit. The price of the
product is only tangentially related to the cost to produce it.
Texting is expensive because lots of peopel are willing to pay the high prices
for the right to do so. (I don't pay it, but that's my choice). If fewer
people were willing to pay for the feature, or one supplier realizes they can
make more money by selling more texting at lower unit costs, the price will
fall.
Adam Smith was right. Nobody's been able to figure out how to overcome the
laws of supply and demand over the long term, despite lots of very smart
people trying very hard to do so for 200+ years.
On Sunday 28 December 2008 9:50:04 pm john@essenz.com wrote:
> Its an interesting article, but I personally have no problem with rates of
> text messaging (per msg) going up even if the "cost of operation" for the
> carrier has not risen.
>
> To be honest, I believe that the carriers have raised per use rates in
> order to push people towards unlimited or bulk messaging plans. And its
> that migration away from per use rates that has triggered an explosive
> growth in text messaging.
>
> Besides, this is capitalism. Prices are set to trigger all sorts of
> behavior. Government should not be telling ATT to lower text messaging
> rates just because they can from a financial standpoint. In fact, its only
> logical that if demand for text messaging is high, then the rates should
> go up.
>
> -John
>
> ----------------------------------------------------
> From : TuskenTower <tuskentower@gmail.com>
> To : Philadelphia Linux User's Group Discussion List
> <plug@lists.phillylinux.org>
> Subject : [PLUG] [OT] NYTimes article: What Carriers Aren?t Eager to
> Tell You About Texting
> Date : Sun, 28 Dec 2008 12:04:23 -0500
>
> > http://www.nytimes.com/2008/12/28/business/28digi.html
> >
> > I thought this part was interesting enough to warrant an OT topic:
> > "Perhaps the costs for the wireless portion at either end are high ?
> > spectrum is finite, after all, and carriers pay dearly for the rights
> > to use it. But text messages are not just tiny; they are also free
> > riders, tucked into what's called a control channel, space reserved
> > for operation of the wireless network."
> >
> > Amul
>
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> Philadelphia Linux Users Group -- http://www.phillylinux.org
> Announcements - http://lists.phillylinux.org/mailman/listinfo/plug-announce
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--
Casey Bralla
Chief Nerd in Residence
The NerdWorld Organisation
___________________________________________________________________________
Philadelphia Linux Users Group -- http://www.phillylinux.org
Announcements - http://lists.phillylinux.org/mailman/listinfo/plug-announce
General Discussion -- http://lists.phillylinux.org/mailman/listinfo/plug
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