mobileStorm, 4INFO, Public Knowledge Respond To T-Mobile’s SMS Price Hike

Since it’s come to light that T-Mobile will likely institute a $.0025 price increase for each SMS sent over its network, those within the industry with an interest in the matter have been quick to respond.

The proposed price increase will have far-reaching implications for nearly every aspect of the value-chain, from aggregators and mobile service providers who are forced to pay the increased fees, to consumers who will undoubtedly see prices increase as well, as added expenses are passed down the chain.  Many will argue that an increase of just $.0025 per SMS is insignificant, but for aggregators and service providers who sends millions or tens of millions of messages per month, it adds up quickly.

4INFO and mobileStorm are two such companies with a business interest surrounding SMS, and as such, have issued statements regarding the proposed price hike.

“It’s very important that pricing for SMS does not change.  Innovation is key in our industry and a price hike will make it harder for businesses to jump in, said Jared Reitzin, CEO of mobileStorm.  “The consumers are already getting charged for using SMS, why does T-Mobile have to double dip?  I hope they understand that senders will send less messages if they cost more.  For T-Mobile’s sake, I sure hope the use of SMS between customers on T-Mobile skyrockets.  They will need to make up the loss in revenue somehow.  Now I could be very wrong in my assumptions, and T-mobile if you are listening, maybe you could help clarify your motives.  It would help if you were transparent, because from the outside looking in, it doesn’t seem like this is the right move.”.

4INFO CEO, Zaw Thet, expressed similar concerns; “We recognize the economic realities of the times, but it is very disappointing that T-Mobile is taking this action against their own consumers and the mobile industry.  This action will stifle (or reverse) growth of mobile messaging service businesses, harming not only consumers but also T-Mobile itself.  Message volume will go down as businesses pass the costs of such programs to consumers, and consumers (as a result) move to carriers that can provide full access to mobile content.”

“This action will likely result in T-Mobile customers being unable to access SMS services offered by businesses, such as real-time sport scores, social networking updates, interactive voting, and special offers,” continued Thet.  “This will affect 4INFO publishers such as Yahoo, AOL, the NBA, Zynga, Playdom, The Weather Channel, USA TODAY, NFL, NBC, CBS, IAC, Comcast …and other media companies, banks, and mobile marketing firms that use text messaging as a communication tool.  They may be forced to turn off services to T-Mobile consumers.  Although the fee may seem small, companies like 4INFO, Facebook, and Twitter send billions of messages to tens of millions of consumers in the US; and the implications of this move from T-Mobile are far-reaching and damaging in the long term. 4INFO has seen great success as we’ve expanded into mobile display/apps, but we are adamant about this issue as SMS is a critical part of our one-stop mobile tech platform”

Even Washington DC-based Public Knowledge, a public interest group working to defend the rights of consumers in the “emerging digital culture,” decided to weigh in;  “These charges represent a ‘market-power’ tax on every business or organization that uses text messaging.  We expect that other carriers will soon follow suit,” said Harold Feld, Public Knowledge legal director.  “There is no indication that the cost that any carrier charges aggregators and mobile service providers to send messages reflects the actual costs of transmission.  Similarly, there is no indication that a cost increase reflects any increase of the cost to transmit the message.”

“The FCC should recognize that the text message is as much a part of the cellphone service as the voice service,” continued Feld.  “Nearly three years ago, we asked the FCC to extend the protection consumers have for voice service to text messaging.  Until the FCC makes it clear that it is willing to prevent carriers from exploiting their positions in the marketplace, carriers will continue to nickel and dime consumers, aggregators, and mobile service providers alike.”

4INFO, mobileStorm and Public Knowledge all share similar views in relation to the carrier’s role within the mobile ecosystem.  This similar view culminated in the creation of the Mobile Internet Content Coalition (MICC), of which all three organizations are involved.  Along with other member companies, the MICC collectively shares a common vision of enabling consumers to access the mobile Internet, mobile messaging and mobile content with freedom and convenience equal to that of the traditional Internet.

The MICC believes that consumers should have the unfettered ability to access the mobile content of their choice via a web browser, SMS message, or any other technologically feasible means.  All “open” Internet standards and practices that would apply to the wired web should equally apply to the wireless web.  The proposed price hike on SMS from T-Mobile is a prime example of the importance and relevance of organizations like the MICC and their missions.

Tell us what you think.  Are you a mobile service provider?  Do you conduct business via SMS or integrate SMS into a product or service?  Sound off in the comments and let your voice be heard.