SMS messages are much smaller than a single TCP packet is capable of carrying (or, if you want to roll your own re-transmit logic, a UDP datagram). They also ha

SMS messages are much smaller than a single TCP packet is capable of carrying (or, if you want to roll your own re-transmit logic, a UDP datagram). They also have effectively no QoS guarantees attached, so you can queue them for transmission whenever bandwidth is unavailable (or would degrade service for more critical streams, like active voice calls). Since the "last mile" bandwidth is effectively free, by virtue of being embedded in the control channel, there's no reason other than "consumers will pay it" that justifies the cost of SMS traffic. The Internet is full of services that blast millions of tiny packets between networks (routing, DNS, etc.) without incurring significant per-transaction costs. There's nothing special about SMS that should drive costs up as much as they have been.