Description:
- Some operators have started initiating action to do bilateral agreements on SMS interconnect (P2P and A2P)
- The current situation is that of bill-and-keep – the operator through which the SMS is initiated does the billing and retains the revenue thus generated
- The current regime of no inter-connect charges payable between operators on SMS should continue
Drivers:
- SMS interconnect charges will increase the pricing of SMS (especially on A2P SMS)
- The cost for an operator to carry SMS traffic is near-zero
- SMS is becoming part of business processes of companies and is also being mandated by RBI and SEBI for specific types of transactions
- An inter-connect charge introduced at this point will stunt the growth of the nascent A2P SMS industry and may also impact P2P SMS usage negatively
- India has the opportunity to produce global cos. which leverage SMS as a channel for permission-based media and communication
Who Affected:
- Operators: Some believe that they are being forced to carry A2P SMS traffic without being compensated for it (especially if they are not in the business of selling A2P SMS capacity)
- SMS Aggregators: will see a dramatic fall in business due to the significant increase in costs that they will need to pass on their customers
- SMS Media companies: will effectively see their business being killed since they send SMS for free to opt-in consumers, and it will be difficult to charge advertisers a higher price to cover the inter-connect charge
- Businesses: will see an increase in costs and will thus limit the use of SMS wherever possible
- Consumers: may not get services they have become used to, or will have to start paying more money for SMS
Now, let us take a look at what has been happening on the ground, and then look at what is the road ahead.
Continued tomorrow.
