Verizon Wireless has put the word out that it’s going to start charging 3 cents for every mobile-terminated text message that goes across its network starting November 1, on top of the existing fees it already charges.
That “poof!” sound you just heard was the SMS content and marketing business in the US vanishing in a cloud of stupidity.
RCR reports “Verizon Wireless representative Brenda Raney said the new fee was necessary to cover the carrier’s overhead in delivering MT messages.” She also added this is the first increase levied by Verizon since 2003 — but what’s changed at Verizon that this huge increase is necessary to “align with [its] costs”? Per-message charges would naturally generate higher revenues as usage grows. It’s hard to see how Verizon’s cost for processing inbound messages could suddenly leap so high that it would have to raise the fee to “align” it.
Also keep in mind that Verizon subscribers get charged for incoming messages, whether on a per-message basis, or as a part of their bundle.
If this charge sticks, it will decimate the commercial SMS business in the United States. Content providers will have to try and suck up the charges, or decide to cut off customers of the country’s second-biggest operator. Neither choice is appealing, and it’s doubtful that very many business plans can adapt to either one. Are many people making more than 3 cents per sent message in revenue?
I’m optimistic that perhaps this new fee won’t stick. Aggregators and content providers will certainly push back, and I think that we may have reached a point where the user bases of services that send SMS messages, like Facebook and Twitter, would raise a tremendous stink should those services say something along the lines of “Verizon jacked up the prices, so we can’t send you messages any more.” That might, just might, help Verizon understand that all these companies sending SMS content to its subscribers actually make its service more useful and more valuable to its subscribers. Sticking the 3-cent fee on to these messages will kill them, in one way or another, leaving Verizon without the fee revenue, but also without the benefits these services bring to it. It has to realize that these services aren’t just red ink, and that they have a value that justifies their cost.
But should the charge stick, I certainly hope other US operators don’t fall in behind Verizon and jack up their charges as well. That, of course, is exactly what they did with the a la carte messaging fees they charge their users, which have jumped from 10 cents per message to 20 cents across the board. That “uncoordinated” action attracted some class-action lawsuits as well as the interest of some regulators and legislators, and a similar action here could (and hopefully would) attract more attention.
Anyhow, what are your thoughts? How badly is Verizon cutting off its nose to spite its face? And if you’re in this space, as a content provider, marketer or aggregator, how — if you can — will you cope?