ChaCha CEO Issues Position Statement On T-Mobile’s Proposed SMS Price Hike

ChaCha CEO Scott Jones is throwing his hat into the ring of mobile service providers who feel T-Mobile’s proposed SMS price hike is bad for nearly every link in the mobile services value-chain.  Below is his position statement in its entirety; “If T-Mobile moves forward with its “twitter tax” that is rumored to begin on …   Read More

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ChaCha CEO Scott Jones is throwing his hat into the ring of mobile service providers who feel T-Mobile’s proposed SMS price hike is bad for nearly every link in the mobile services value-chain.  Below is his position statement in its entirety;

“If T-Mobile moves forward with its “twitter tax” that is rumored to begin on Oct 1st, ChaCha absolutely will drop T-Mobile from our service.  T-Mobile is a carrier that doesn’t understand the realities of content businesses including Facebook, Twitter, ESPN, and ChaCha.  ChaCha has more than 15 million monthly unique users for whom we answer over 2 million questions every day. The vast majority of these answers are delivered by SMS text. T-Mobile is already getting paid by subscribers for these texts and they are paid something already by aggregators/publishers.  Now, they plan to impose an egregious and unacceptable tax.

Given that the costs to deliver text are miniscule, T-Mobile already makes profits from what they charge their customers, aggregators, and publishers.  There, T-mobile is “triple dipping.”  We don’t see any reason for this, other than greed.

This will be unfortunate for T-Mobile users who will either need to switch to another carrier to enjoy texting services, or access similar services via the mobile web and/or mobile apps (for which T-Mobile gets nothing incrementally). Starting today we will make it clear to our T-Mobile users that ChaCha would still be available on other carriers and/or via the mobile web or mobile apps.

If T-Mobile moves forward they will give their subscribers reasons to consider other carriers and/or prevent defectors from AT&T/Sprint/Verizon from considering T-Mobile.  Also, their proposed pricing move will completely stifle innovation in the space, further harming T-Mobile customers.

ChaCha knows that our real-time “answers” and dbase of billions of answers is valuable and can be leveraged within any of these platforms.  We prefer that T-Mobile not take this step, but if they do, we will no longer provide our free SMS service to T-Mobile and shift the traffic to other carriers and platforms. It’s unfortunate for T-Mobile subscribers since they will miss out on ChaCha and many free services because of this short-sighted move by T-Mobile.”

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