The Incoherence of AT&T's New Text Pricing Plan

By Alexis C. Madrigal

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AT&T announced that its doing away with its budget $10 for 1000 text plan. The networks' users will have to pay $20 for unlimited texts or a whopping $0.20 per text. For reference, the company offers two gigabyte data plans for $25.

Gizmodo's Sam Biddle broke down precisely why these two pricing plans (data and text) are so ridiculous in a smart post today. Texts, after all, are also data, albeit a tiny amount, just 160 bytes. He runs through the math of how much that 160 bytes would cost you if AT&T filed it under the data:

AT&T charges $25 for 2 gigabytes of mobile data, which states how much they think their bits and bytes are worth. That comes out to 80 megabytes per dollar. 80 megabytes will get you 500,000 text messages--assuming you're writing the largest possible message, which you're often not (i.e. "Hey" "Nothing" "lol").

Now divide that dollar by the 500,000 potential texts. That comes out to $0.000002 per text--two ten thousandths of a dollar. A very, very, very small amount of money.

Now, let's say you send 5,000 texts a month. That's a large, though wholly realistic number. Multiply that by the above worthless cost per text, and you've got--hold onto your wallet!--$0.01. A penny for five thousand texts, according to how much AT&T says its data is worth in a data plan.

But outside of the data plan? Oh boy! Things get very different very fast.

We thought a simple chart might help make Biddle's point, which you can see at the top of this post. The shortest version: cell phone companies are overcharging for texts just because they can.

This article available online at:

http://www.theatlantic.com/technology/archive/2011/08/the-incoherence-of-at-ts-new-text-pricing-plan/243838/