Signal Messenger: Privacy costs a lot of money

Signal discloses its operating costs to protect privacy - and criticizes the profit-oriented surveillance business models of its competitors.

The Signal Foundation, which runs Signal messenger, has published a full breakdown of Signal’s operating costs for the first time. This year they amount to around 40 million US dollars; by 2025 they are expected to rise to 50 million US dollars.

The decision to publish the detailed cost figures for the first time in a blog post – going far beyond the legal disclosure requirements for nonprofits – is more than just an open appeal for end-of-year donations, said Meredith Whittaker, Signal ‘s president , told US computer magazine Wired . By disclosing the costs of running a modern communications service, she aims to draw attention to how competitors pay these costs: either by profiting directly from the monetization of user data or, Whittaker argues, by connecting users to networks who often work with the same business model of profit-oriented surveillance.

The Signal messenger service is a non-profit project that competes with well-financed messenger services such as Telegram , WhatsApp, Facebook Messenger, Gmail and iMessage. “We believe that the honesty with which we discuss these costs helps shed light on the engine of the tech industry, the business model of surveillance, that is not always obvious to people,” he said Whittaker told Wired. Running a service like Signal – or WhatsApp or Gmail or Telegram – is “surprisingly expensive”. Whittaker believes that “the companies that pay these costs through surveillance” don’t want users to know this.

Cost factors infrastructure and privacy

Signal’s infrastructure costs, including server, bandwidth and storage costs, are $14 million per year. About 20 petabytes of bandwidth, or 20 million gigabytes, are used annually for voice and video calls alone. That costs Signal $1.7 million per year. In turn, $6 million a year goes to telecommunications companies, payments for the SMS messages that Signal uses to send registration codes that verify the phone numbers of new Signal accounts. Those costs have risen, Signal said, as telecommunications companies charge more money for these text messages to offset declining SMS usage worldwide.

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Signal spends another $19 million per year on staff. The messenger service now employs around 50 people – a small number compared to services with a similarly large user base, which often have thousands of employees, but far more than a few years ago. In 2016, Signal only had three full-time employees working in a single room in a co-working space in San Francisco.

Whittaker points out to Wired that many of Signal’s features cost more than other messaging services because of additional costs to enable privacy-preserving features. Signal, for example, not only encrypts the content of calls and texts, but also users’ contacts and even the names and photos of their user profiles. This often requires more time-consuming and expensive technology than working without encryption.

Financing model: donations

Signal Messenger, which was originally founded with funding from the US State Department’s Open Technology Fund, relies on donations to survive. According to Whittaker, several major donors help cover the foundation’s costs. For example, Twitter co-founder Jack Dorsey has pledged $1 million per year; others, whom Whittaker did not want to name, had promised similarly high contributions.

However, Signal hopes to be increasingly funded through small donations of as little as $3, which can be made through the app itself. According to Signal, small donations now account for a quarter of operating costs. The trend is on the rise, but for Signal to continue to exist and grow without depending on a few wealthy individuals, small donations will need to increase significantly, Whittaker said.