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Carriers Dismiss SMS Price Fixing

Who us, collude? The US’s four biggest national operators have dismissed the notion that they have done anything wrong in their recent SMS price hikes. In letters sent to Senator Herbert Kohl who had asked the operators in early September to justify their pricing, the carriers argued they’d actually reduced the cost of texts, and what’s more, were now being bombarded by a flood of class action lawsuits (20 to be exact) alleging that they’d acted together to fix prices, reports RCRWireless.com.

Though all four carriers recently jacked up the individual price of an SMS to 20 cents, compared to 15 cents just two years ago, and 10 cents three years ago, T-Mobile defended itself by saying that it had brought down “by more than half” the cost of its texting packages—which they claim 90 percent of their customers buy. Note that T-Mobile is the only carrier to actually justify the pricing of their text. AT&T (NYSE: T) was more concerned by the class action lawsuits, while Verizon (NYSE: VZ), wouldn’t even let its letter to Kohl be made available to the public. The humble text message remains an important revenue generator for operators—witness Verizon’s recent proposal to charge partners to send texts on their network. According to CTIA, the vast bulk of the $27.5 billion a year operators earned from wireless data, came from text messages.

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Oct 14, 2008 7:24 AM ET

Posted In: Legal, Companies, AT&T, SprintNextel, T-Mobile, Verizon

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