Cell phone firms queried on rising texting rates

Cell phone firms queried on rising texting rates

Cost of sending or receiving a text message in the US had doubled since 2005

Wednesday, September 10, 2008

WASHINGTON, USA: The chair of the U.S. Senate's antitrust panel sent a letter to four top cell phone companies on Tuesday asking them to explain what he said were a doubling in the price of text messages in three years.

Sen. Herb Kohl, chair of the antitrust subcommittee and a Wisconsin Democrat, wrote to Verizon Wireless, AT&T Inc, Sprint Nextel Corp and T-Mobile TMOG.UL to express concern about "what appear to be sharply rising rates your companies have charged to wireless phone customers for text messaging."

Verizon Wireless is a venture of Verizon Communications Inc and Vodafone Group Plc.

Kohl, noting the four companies served more than 90 per cent of U.S. cell phone users, said the cost of sending or receiving a text message had doubled since 2005 to 20 cents on all four carriers.

"What is particularly alarming about this industry-wide rate increase is that it does not appear to be justified by rising costs in delivering text messages," said Kohl.

"Also of concern is that it appears that each of companies has changed the price for text messaging at nearly the same time, with identical price increases," he wrote. "This conduct is hardly consistent with the vigorous price competition we hope to see in a competitive marketplace."

Kohl asked the four companies to explain why the price of texting had risen, and how the price of texting compared with sending e-mails or making telephone calls.

©Reuters

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gangadhar G. Barve said on 9/11/2008 4:56:30 AM:
We have TRAI to do this job but unfortunately the powers that be concentrate only on technical matters and leave revenue aspects to competition (or cartelling?)

to gangadhar G. Barve