Tuesday February 1 2011

Is calling cheaper than text messaging?

Is calling cheaper than text messaging?

Is calling cheaper than text messaging? 

By Faridah Kulabako

Ms Sylvia Bingi, 20, a first year University student at Makerere University reaches for a mobile from her handbag then sends a text message.

Not long after, her phone vibrates probably a reply has come in. She reads the reply and begins typing again.
This goes on for a couple of times.

She then explains to me that she was having a text message conversation with a friend using the little airtime she had.

To her and her friend, text messaging is the best way to minimise mobile phone costs but still effectively communicate with colleagues. To them, it looks like sending a text is cheaper than making a phone call.
This is a popular belief especially among the youths who are said to talk less on the phone but send out many text messages.

However, Ms Bingi and other Ugandans who choose text messaging over voice transmission may not be saving as much as they think.

Perharps that was true a year ago when making a phone call was still expensive averaging at about Shs300 per minute.

According to Uganda Communications Commission, voice traffic grew from 1.4 billion minutes in 2008 to 1.6 billion minutes by the end of September 2009.

Calls within various networks increased from 1.1 billion minutes to 1.3 billion minutes due to lower call rates within the networks during the period.

Calls to other networks dropped from 270 million minutes to 218 million during the period.

SMS traffic, however, dropped from 190 million SMS in 2008 to 131 million in September 2009.

The decreasing SMS traffic, according to UCC, was a result of the falling voice charges.

But the 2009 drop in voice calls was mainly on-network as players tried to ring face subscribers within the network. 

However, a major price drop in the local mobile tariffs became more evident last September when Warid Telecom slashed its call rates to Shs5 within and off-network forcing other players including: Uganda Telecom, Orange, Airtel and MTN to cut their with-in and off-network to Shs3 per second, a rate that Warid also adapted to later.

This accounted for over 60 per cent price drop from a market average of Shs300.

SMS charges within and to other networks, on the other hand, remained high.

For instance,   MTN charges Shs110 for an SMS within the network and Shs130 per message to other networks during week days and only charges Shs50 within the network over weekends and late night.
Warid Telecom charges Shs100 within the network and Shs125 to other networks, Orange charges Shs90 across all networks while Uganda Telecom and Airtel charge Shs90 and Shs110 across all networks respectively.

International SMS charges are Shs220 for MTN, Orange and Airtel respectively while UTL charges Shs180.
Each text message has a maximum of 160 characters, including space and symbols and if a text message exceeds the fixed 160-characters, the customer is charged for two messages.

At an industry average of Shs100, having a text conversation becomes more expensive than making a voice call for Shs180 per minute.

This is because having a text conversation requires one party to send at least more than one message.
If each party sends three text messages, totaling to Shs300 per person, the conversation would end up costing Shs600 instead of one party spending Shs180 a minute for voice conversation.

Mr Moses Moga, a businessman along Kampala Road, told Business Power that the competition in the telecom industry has made texting, once his favourite, less economical and often far less convenient.
“Text messaging takes too much time and the conversation goes on for too long and sometimes you don’t get to complete story,” he said.

Mr Joseph Kanyamunyu, Airtel Uganda public relations manager says he prefers making a phone call because it’s cheaper and allows for immediate response.

“You can’t use SMS if you want a speedy response. You never know when the other party will have time to respond to your text,” he noted.

Warid Telecom Chief Executive Officer Madhur Taneja told Business Power that sending a text message is convenient especially when one is not able to talk especially while in a meeting.

Mr Sean Okiria, a sales representative, says he prefers making a phone call to get instant feedback.
“If someone calls me, I will immediately answer but when they send an SMS, sometimes I don’t reply immediately,” he says.

He adds that it is even cheaper to call than sending a text message.

“I can have a thorough voice conversation for a minute for just Shs180, why then should I send an SMS of Shs110 when am not even sure whether the other party will respond,” he asked.

However, due to the cut-throat competition in the sector to retain and attract new subscribers, some telecoms have launched promotions offering free and cheaper SMSs to their subscribers.

For instance, last week, Airtel launched a texting offer named fretxt that enables its subscribers to sign up for unlimited daily, weekly and monthly text bundles at the cost of Shs200, Shs1,000 and Shs4,000 respectively and send free Airtel to Airtel SMSs and Shs50 to other networks.

Airtel Managing Director V.G. Somasekhar said the move aims at stimulating SMS usage which is still low compared to other countries like India where the rate is over 50 per cent.

Despite the tiresome back and forth typing involved in SMS to make things clear, text messaging can allow one to send texts to more than one mobile phone at once.

Mr Simon Kaheru, the business director of SMS Media, a bulk SMS firm, says SMSs are cheaper especially for businesses as it helps them to reach out to a wider number of people using less money.

He adds that SMSs also offer a platform that enables businesses to keep in touch with their current and potential clients, thereby building a rich relationship through.

At the same time, he adds, one will be reminding clients of their new services and goods, which can not be done often if one is using voice calls.

However, SMSs have challenges including some elements of mobile phone illiteracy among the populace, especially if those receiving the messages cannot read them because they do not know the applications on their phones.

The platform can also be affected by network failure, which at times stops the messages from reaching the recipients, or in other cases diverts them to wrong recipients. An SMS, if sent in wrong faith, can also be used against someone as its in a permanent form.

In more developed markets, SMS is considered a core service and is usually given as part of an inclusive package, while in Africa most mobile users concentrate their usage on voice services since SMSs are overpriced.

For instance, a recent Nielsen statistics report indicates that in the United States, teenagers send an average 3,339 SMSs a month, with girls sending as many as 4,050 SMSs.

In 2009, worldwide SMS revenue stood at $102.3 billion with annual worldwide SMS traffic volumes rising to nearly 5.5 trillion SMS during the period and total SMS traffic was projected to break 6.6 trillion in 2010.