Why arbitrary 160 character SMS limit?

The LA Times article reveals that a dutiful German engineer sat in 1985, pecking away with random sentences, and thought 160 characters was just about right. As the LAT article notes, the GSM system as conceived in 1986 initially had only space for 128 character SMS, but trimming the character set allowed 160 characters. The recycling of wasted space in GSM and AMPS cellular protocols brought the amazing overcharging regime of $0.25 per text message.

SMS pricing USA vs. Europe

Thankfully when I started using SMS in 2000-2001, there was no such nonsense, SMS was included in my business Nextel plan, at worst as a flat fee. It was only after SMS got popular that extreme pricing took hold in the USA. In Europe, SMS took off over a decade ago, with typically SMS receipt being free and SMS sending charged per message, perhaps 5 cents each regardless of length (1-160 characters).