Comments on: SMS Interconnect Charges – A blow to A2P Service Providers

By: Lox24

Lox24 — Fri, 20 Nov 2009 10:45:30 +0000

Interconnction-Fees are really a problem, worldwide, also here in Germany. The Provider earn so much money with sms, and there is nearlly no challenge between the networks, caused by interconection fees.

By: Vinuth

Vinuth — Wed, 11 Nov 2009 11:13:01 +0000

It’s time to move on to mobile internet and away from walled gardens.

By: Bulk SMS

Bulk SMS — Mon, 09 Nov 2009 17:01:13 +0000

I am on idea postpaid. My call charges are lower than SMS chanrges. So, I prefer calls than SMS, but in some situations SMS is preferred rather than call. e.g. when the person from whom we need to collect money is not picking up the phone, we can send him SMS. I use senti SMS to send to my wife.

I think companies get us hooked on SMS and then earn out of it.

By: Hitanshu Dewan

Hitanshu Dewan — Mon, 09 Nov 2009 10:56:59 +0000

Fully agree with you.

By: Mayank

Mayank — Mon, 09 Nov 2009 10:53:58 +0000

I am totally with you in saying that the application providers should have had a contingency plan. I am not even saying that there should not be interconnect charges. But given the sizes of telecos, I don’t think A2P service providers will have enough muscle to negotiate with them. The current decision by Airtel is completely unilateral and serves its purpose only. That is why I am saying only a government intervention through TRAI can bring sanity in this market and will provide some guidance into the future.

By: Hitanshu Dewan

Hitanshu Dewan — Mon, 09 Nov 2009 09:27:59 +0000

Mayank,
I completely understand your situation…and I also understand that changing market scenarios do impact companies – especially startups – adversely – especially in this fast changing internet/telecom domain; but just step out and consider this: When all those bulk SMS companies mushroomed, did they take the Telcos or TRAI into confidence about the sustenance of the charges? Probably not. They saw a price differential, they jumped into it…
I really dont know what a right or a wrong charge for such service is…may be the market is the correct determinant..
But I think any business plan – around such a service – should have had a contigency plan/safegaurd for such changing market scenario….
Or let us step back and try to answer a simple Question while drafting the plan: “The charges are Zero, are they sustainable when the market is flooded with such services?” Ans: Probably not…
Then taking the market dynamics into consideration you would automatically want to create a scenario for the telcos to sustain it…We probably cant cry foul…
I think the bulk SMS suppliers coming together to create a strong lobby to make the telcos offer them goodies – or at least a fixed term price- is a better proposition than to wait for TRAI to interfere, because TRAI would only interfere if some licensing condition has been voilated, which probably has not been; but ya, if some usage terms promised to the application companies – you know best – have been violated you have a case.
Further, given the dynamics of the industry, TRAI should at least now step in to provide some predictability such that these applications can evolve accordingly.
That is the least government can do to encourage entrepreneurs.
Just my personal opinion – while having a soft corner for anyone who is feeling the brunt of this.

By: Mayank Raichura

Mayank Raichura — Mon, 09 Nov 2009 08:36:48 +0000

Lols Ashu. I think Airtel is trying to compensate for the declined costs of pay-per-second tariff from A2P users.

By: chaman raj

chaman raj — Sat, 07 Nov 2009 11:55:46 +0000

Now TRAI will interfere and will fix the termination charges and similarly other regulations will come to reduce SMS charge to customers which is around 50p normally . The one who will lose with all this is small business who used it as marketing tool as bulk SMS will not be that cheap. Businesses around SMS application will also be affected.It may reduce spam SMS.

By: Ashu

Ashu — Sat, 07 Nov 2009 10:39:56 +0000

This is the age of information / information sharing and at the lowest cost . Smart people at Airtel should realize the recoil that can happen with this move of pricing the termination .

Airtel is barring the consumer , to a great extent , from all the information that is being provided to him/her without any search.

I sincerely believe , no other telecom company should do something as stupid as this and construct an opportunity for competition .

In any case , who really wants Airtel . I am waiting for number portability , just a matter of time . Ha !

By: SMS DEALS

SMS DEALS — Sat, 07 Nov 2009 06:24:05 +0000

ya right…. We also think that companies will not have a better choice.

By: G- Tech

G- Tech — Sat, 07 Nov 2009 06:22:54 +0000

yeah right… it’s not only gonna effect the providers in the market but also the companies which are using this as a marketing tool as it is so cheap in terms of marketing… Now companies will rethink to use this option however, it is still the cheapest marketing tool so we think they don’t have another choice…….. what do you say???

By: Naresh

Naresh — Sat, 07 Nov 2009 01:43:40 +0000

It’s unfortunate that Airtel chose this direction which now coerces the bulk SMS industry to alter its biz model. However, TRAI is not the solution. Regulation will – as it always has – will fail.

Let’s remember that the mobile operators themselves are facing pressures from newer entrants and prices will eventually fall. It’s not all doom and gloom.

By: Mayank

Mayank — Fri, 06 Nov 2009 08:37:39 +0000

I think the missed call concept came more out of convenience rather than free cost. Even if we had free outgoing sms it would be more convenient to dial and cut the call than to send a sms. But yes if SMS were charged at real prices, it would have given rise to more innovative sms based applications.

By: Mayank

Mayank — Fri, 06 Nov 2009 08:35:12 +0000

You are right Hitanshu. We cannot have a scenario in which the advertiser has a near free access to these services in which case they will only generate spam. And that is why TRAI should have stepped in earlier before things went out of control. But the problem is this scenario gave birth to real unique applications which will not survive if the cost were to increase drastically.

By: Hitanshu Dewan

Hitanshu Dewan — Fri, 06 Nov 2009 07:46:42 +0000

Given that the bandwidth/infrastructure usage – at least for the recieving telcos -for SMS originating at a mobile phone, or at bulk provider is the same, the cost should also be the same….; moreover, in contrast to Mobile SMSs, more often than not the bulk SMSs originate at some advertisers, who can- and -should pay for this advertising. Though such a move would understandably hit the bulk SMS providers in the short/medium term, the part revenue lost can still be recovered by charging the advertisers…

I completely agree with you that TRAI should regularize the charges, but I doubt if TRai would/should agree to a ” 0″ charge..

There is no free lunch after all.

By: naman

naman — Fri, 06 Nov 2009 06:54:35 +0000

I suppose the telcos did a very good marketing of SMS. In the US SMS is not used as much in India. Specially the youth is now hooked on to SMS. P2P SMSes were free when Reliance was launched and then in 2006-07 it was almost 1p/sms thorgh SMS Value packs.
Once the consumer got hooked the telcos increased the price and the cheapest P2P SMS now is 10p/SMS.
Same strategy for A2P as well. they started with 40p to make it look premium. And then gradually reduced it to 2-3p to let the user and applications taste the service. Now that there is a sizable mass they are increasing it to 15p. This happens with every business. One shouldn’t be surprised if voice call rates are increased after 2-3 years when people cant do without it.

By: Kasi

Kasi — Fri, 06 Nov 2009 06:20:46 +0000

If we look at data-vs-cost SMS should cost only 1/100th of the voice cost… but alas our operators don’t want people to use SMS … they want them to hook on to the voice.

If SMS is charged at their real prices we would not have invented the missed-call concept

By: arvind

arvind — Fri, 06 Nov 2009 06:00:06 +0000

Good one, Mayank.