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The size of SMS is low because it sits on the back of the control signals that are always being sent from phone to tower. There isn't any more space to make them larger unless you send them as data, which then isn't "free" bandwidth (from the carrier point of view). So yes it is left low on purpose but nothing to do with low signal conditions.

Does this mean that in effect, carriers barely pay an extra in terms of bandwidth for every SMS message that is being sent and that they gently charge a hefty price for ?

This is even worse than I thought !

Edited 2012-03-26 06:56 UTC

I'd just be happy if transmission could be trusted. I've lost count the number of times an sms has been recieved hours or days after I've sent it. A dropped email is unheard of but dropped or delayed sms.. all the time.. wtf is that?

All phones I ever owned have had a setting to be notified when the message reaches its receiver. I do not use it, but has noticed the setting is there. I have not upgraded to what is currently considered a smartphone, though, and wouldn't be too surprised if they lacked this feature. (I'm pretty sure my phone was markeded as a smartphone before iOS and Android arrived, but whatever.)

You know, this is precisely where Apple could really shake things up and get competition going again, if they cared to. Take iMessage. Let's say they offered it free to Apple device users, then made apps for Android, WP7, and Windows (if you can trust Apple with Windows software after what they've done with iTunes) and charged users of those apps a subscription, perhaps $5 per month? This would encourage the carriers to compete, which would bring the cost down and may even improve the total user experience for everyone along the way. More apps would mean more people using iMessage instead of the carrier plans, this would mean that carriers lost money and had to make something better, and everyone would win in the end. It's too bad that Apple doesn't realize the opportunity they have here, and would rather keep such services locked to their own devices. They have every right to do this of course, but it does sadden me to see so much potential for improvement go unexploited. Apple are one of the few companies who could do this successfully in our climate of business, as they've got not only the money but the legal force to resist attacks by other large giants.

There's ~180 bytes of padding in every single GSM control packet. This is mandated in the GSM specs.

Someone decided to capitalise on this "wasted" space in each packet, and came up with SMS, a simple way to transmit 160 characters (plus destination number and whatnot) between devices.

In effect, SMS is "free", as those 180 bytes are transmitted everytime, whether it's all zero-padding or an SMS message. The fact the telcos charge *ANYTHING* for an SMS message just shows the level of their greed.

What's sad is that over a decade (or two?) later, nothing better has come along to replace it. And now, the telcos actually have to over-provision GSM channels in order to provide more bandwidth for the control packets (the part that's supposed to be the least-active). RIM's BBM is the closest we've come to a "standard" text messaging protocol to "replace" SMS, which is really sad.