The operator's response regarding free SMS is a little bit disingenuous in saying that the cost of SMS is there to ensure the infrastructure for running SMS is paid for. Except for the following little details:
1) SMS is transmitted over the same infrastructure that voice is transmitted over, therefore if you are servicing voice, you have already put up the infrastructure for servicing SMS.
2) Individual SMS traffic makes up a small overall proportion of network traffic compared to normal voice/data traffic. If you were to cost SMS at the same rate as data traffic, SMS would cost many orders of magnitude less per message.
3) SMS is transmitted over a dedicated transmission band (control messaging) that is required for general cellular functionality, therefore there is no "additional" infrastructural cost.
While it's fair to say that cellular providers should make some money off of SMS, they could be charging 7x less than they currently do and still make strong profit on SMS traffic. The reason they don't is that SMS is incredibly lucrative and it's easy to "hide" the costs from consumers.
