Pipe me a river

"If carriers move to the "Pipe" model, then there will be less investment and a lower level of service. Carriers won't keep up service levels if no one can see the difference."

Nonsense. I am paying for the use of a pipe. If the pipe provider is so stupid or greedy they ignore maintenance and upkeep of the pipe, I will switch to a less stupid pipe provider with a better quality pipe. If you fold because your business model relied on trying to screw people for the pointless add-ons you bolt to your pipe - tough.

How exactly do you distort the meaning of "service levels" into "no one can see the difference"?! The bandwidth, latency and reliability delivered are all very obvious to users - and indeed are the basis on which I and presumably others choose my pipe provider, for both home and mobile connectivity. A company which is putting resources into non-pipe services is not one I'd want to buy from, in the same way I don't want to buy my mobile phone service from British Airways or FedEx: they are focussed on the wrong thing to deliver that service. Whether in denial or not, O2, Vodafone and co are in the business of selling pipes and re-selling other people's hardware to use the pipes with, nothing more.

Ramazan has a point that SMS uses infrastructure the other services don't - which is why they are more efficient and cheaper. So what? Steam engines cost money too, but very few people whine about them being misunderstood - we just get on and use the diesel or electric replacements. Most of the plant you list is not SMS-specific though: the actual cost of an SMS should be a tiny fraction of the 6p I would pay right now in the unlikely event I decided to send one, and much closer to the price I'd pay for sending those 140 bytes over the data connection instead.