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A2P SMS: The Impact of a High SMS Interconnect Charge

September 17th, 2009 · 5 Comments

What does this mean for end customers? If other large operators followed Airtel with SMS interconnects, businesses would end up paying substantially higher prices for A2P SMS capacity. Given that SMS is becoming a necessity across many lines of business in various industries, this is an unfair penalty being imposed on enterprises and therefore on customers.

For consumer-centric A2P SMS services, it would sound the death knell. There is no way they would be able to afford these higher costs, and would in effect be forced to curtail services to the extent of making them practically useless. An innovative business model created in India would die.

Incidentally, TRAI had looked at the SMS Interconnect issue in 2006, and come up with a consultation paper on the issue. TRAI did not come out with any recommendations on the issue (A2P SMS was still a small industry then). They left it to market forces to decide (“forbearance”) even though, from what I gathered talking to people involved in the process then, the intent was “Bill and Keep” (which would have meant no interconnect charges).

So, what is the solution? Is there one which is fair and equitable? Yes.

Continued tomorrow.

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5 responses so far ↓

  • 1 Posts about Forbearance as of September 17, 2009 // Sep 17, 2009 at 5:02 pm

    [...] stimulate for sure that you acknowledge of several initial techniques on pet grooming. A2P SMS: The Impact of a High SMS Interconnect Charge – emergic.org 09/17/2009 What does this mean for end customers? If other large operators [...]

  • 2 Dasher // Sep 17, 2009 at 10:41 pm

    This interconnect fee will kill the golden goose called SMS in India. This is one area where India is ahead of countries like US but this will put an end to this. Imagine ISPs charging 15p for sending an email message what that will do to email.

  • 3 abc // Sep 18, 2009 at 5:09 pm

    Instead of focusing on SMSs, it better you focus on your core domain strenght of mass emailing.

    Just reduce pricing to 1 paise per email and see the traffic you generate.

    Also, pls build channels to get SMSs on shortcodes. Incoming where you share the revenue from operator.

  • 4 Dasher // Sep 25, 2009 at 9:20 pm

    If the operators get greedy and charge interconnect fees, then the indian mobile industry will look like the one in africa described in this article.

    http://venturebeat.com/2009/09/25/africas-sms-crisis-and-how-to-stop-it/

  • 5 Africa’s SMS Crisis « Raja Jasti’s Blog - Renaissance Thinking // Sep 25, 2009 at 11:27 pm

    [...] money to this ecosystem and therefore to carriers. But recently some greedy carriers are trying to implement interconnect charges that is threatening to kill the SMS ecosystem in India. If this becomes the [...]

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