CATEGORIES
- NYC COVERAGE
- WEB STARTUPS
- WEB NEWS
- CONFERENCES
- WEB TECH JOBS
- VENTURE CAPITAL
- MICROSOFT
- INTERVIEWS
- ADVERTISING
- VIDEO
- ALL TOPICS
- ALL COMPANIES
CONTRIBUTORS
Verizon Triples SMS Marketing Rates; Will it Affect Twitter?
Mobile Marketer is reporting that Verizon Wireless has "decided to levy a 3-cent transaction fee for every outbound SMS message sent to its subscriber base". One of the immediate questions is whether the other carriers will follow suit. For some marketers this charge is double or triple what they are currently paying. The article explains that this will affect a variety of service providers, "The rate increase will affect heavy users of legitimate outbound SMS messaging in the entertainment, retail, sports, news, weather, travel, food and political sectors. But it will also affect the mobile service providers they use to send out messages, such as SMS aggregators, providers and agencies."
Verizon Wireless says this is the first increase since 2003. B. Raney, executive director of corporate communications at Verizon Wireless said of the price increase, "Just like any business, we reassess our charges to make sure they align with our costs for providing the service and sometimes it becomes necessary to make adjustments".
NYC mobile blogger Dean Collins notes, "Basically Verizon have slammed shut the SMS industry in the USA".
My question is will this sms message increase affect Twitter? If it does, how will Twitter react? We know Twitter stopped offering SMS service in the UK because the costs were apparently $1,000/yr for 250 messages per week per user.
This will certainly make other wireless providers consider raising their fees. This is what happens when a companies gains a strangle hold on an industry. Has anyone thought about how coincidental it was that this nonsense was leaked to the public just as soon as the news that Verizon was taking over Alltell and becoming the de facto largest US wireless provider died down? From all investigation conducted, it has been established that it costs the wireless companies a faction of a cent to transmit sms and that the fees being charged is almost a 100% profit. So what cost is Verizon trying to defray? How can Verizon justify this increase being that they take about 50% of all revenue accruing from premium campaigns? I believe we have a hungry shark on our hands!!
I predict this will force Twitter to limit outbound SMS service for Verizon subscribers almost immediately.
Thanks Brady – should be really interesting – especially if the other carriers follow suit.
I don’t use twitter via sms – just via the webclient at home and the mobile web site when on the road.
“to make sure the charges align with our costs”
It costs virtually nothing for carriers to handle SMSs. A fraction of a cent at best.
This is not about recouping costs, its about seeing how much people are willing to pay.
Precisely. SMS is already ridiculously overpriced on the consumer side as well.
Shouldn’t their costs be dropping for this?
It will definitely affect Twitter… afterall,Twitter isn’t really making money yet so to have to spend any more during these times isn’t a good move.
In my opinion, Verizon is making a big pricing mistake. I have not read anywhere on the web as to why they are making such a big increase that will have huge ramifications across the industry. I am looking forward to the feedback and the events that will happen in the coming days, and how it will all unfold. I guess that we will really find out what the price elasticity of demand of SMS is really soon.