FREE LOAD for real – a challege for Pinoy techies

FREE as in yes!
FREE as in yes!

It is almost election time, and candidates will promise anything, including free load.  Should you fall for it? Nah, you can do it yourself.  All it takes is a little social network, and some great work by Pinoy techies.

Why give some politician “credit” when you can do it yourself?  This makes me wonder about all sorts of proposals to tax text messages.  It is almost as though the politician making the proposal is pulling our collective legs.  How can you tax something like knowledge or a Google search, whose price is effectively free, without being accused of oppression?  Libre na nga, papatongan mo pa ng buwis? Besides, somebody has to pay the tax, and ultimately the consumer pays.

The major telecoms appear to want the basic text price to remain at P1, something so ridiculous since that is what it was when the text message market started to become significant some twelve years ago.  Based on Moore’s Law (the cost of anything digital halves every two years), if P1 was profitable in 1997, P0.015, or less than 2 centavos should be humongously profitable today.

The average consumer will be quite happy to pay P0.05, and the telecoms would be quite happy to charge that much (maybe more or less, if only so that their systems would not overload.). Of course, they would prefer a higher price if they can operate as a cartel, which makes me think that they wish they could, but won’t because it is illegal and would be a public relations disaster.  Instead, they compete with various promos for “within network” texts, where the price is close to P0.02 for the heavy texter.  I assume that the promos will stay because the consumer has gotten used to it, and in any case the promo is still a profitable game for the telecoms (they compete that way).

So here’s the deal.  At the individual level, the heavy user can use two phones, or a dual- sim phone, so that he pays only the “within network” price.

But what about the rest of us?  Here’s where the ideas in Chris Anderson’s Free come into play.  What you need is what techies call an “app” and a network of “friends.”  The kernel of the idea is this.  If you want to send text from, say, Globe to Smart, you send the text Globe-Globe to a friend who has an app inside a dual-sim phone.  The app picks up your text, and re-sends it Smart-Smart.  Maybe, in return, you have to be nice or do a favor to your friend with the dual-sim, but that is what social networking is all about.

There are possible kinks to work out.  The friendly dual-sim phone cannot overload the system to the point that the telecoms will retaliate by shutting him out.  This may happen if he’s sending, say, more than 500 texts per day.  So the app must have an automatic limit per day and will return an “I’m full for the day” message if need be.  The original texter will then send his text to another who’s not “full up.”

The text message will likely contain the original sender’s name or cell phone number, if only so the recipient knows who was sending it, as well as the final recipient’s number.   This is no different from the common practice of “paki text nga” where one uses another’s phone because one doesn’t have load.  The telecoms may take to reading messages and refusing to carry this kind of text, but I believe such refusal would be illegal.  It would be an abuse of right (see Art. 19, Civil Code) for a telecom to offer a content-neutral text messaging service and then renege.

The texters can get 5 centavo text through social networks, or in the alternative, the telecoms will give it to them in some equivalent form.  Perhaps the 5 centavo text will contain a targeted ad.  Or, text becomes free for those with a minimum plan or who use up voice and other services up to a threshold. The same business model is taking over the music industry and other products that are now free or almost free because, as economists say, their marginal cost is zero or almost zero.

You may wonder how an across-network text can be free if the telecoms charge each other for “foreign” texts.  The answer is that the interconnection price is a matter of agreement, and will have to go to near zero if the telecoms want to give convenience to their customers.  Note that the interconnection cost is a “net” concept, being zero if there is a balance of trade between two telecoms.

So, to all you techies out there: Develop the app, give it away for free, and be a Master of the Digital Universe. Google or its equivalent will give you a great job when you meet this challenge.  That is, if Chris Anderson is right. And I believe he is.

PS: I’m no techie, so I have no good idea how to do the app.  I imagine you can hook up two phones or a dual-sim phone to a netbook, and use the PC to “cut and paste” the incoming text message to send to the other network.  But there may be a way to do it with a dual-sim phone without having a PC as an interface device.

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