Verizon to hike fees for mobile-terminated messages
Verizon Wireless has informed its content and messaging partners that it will introduce a 3-cent fee for all mobile-terminated messages delivered across its network beginning Nov. 1. According to an email sent by Verizon billing partner OpenMarket and obtained by RCR Wireless, the operator will append the 3-cent charge to both standard-rate and premium programs, a move that promises to significantly impact a host of firms throughout the mobile content industry, in particular those whose businesses depend on SMS-based text-search results, news alerts, sports updates, interactive voting and related messaging services.
Verizon Wireless representative Brenda Raney said in an email to RCR that the fees are necessary to cover the carrier's costs on delivering mobile-terminated messages. "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," Raney writes. "In this instance, this is the first increase the company has implemented since the service began in 2003." In January, Verizon increased costs for sending and receiving text messages to 20 cents apiece, up from 15 cents each, a move instituted to drive subscribers over to messaging bundles.
For more on the Verizon messaging fee:
- read this RCR Wireless article
Related article:
Verizon reaches messaging milestone
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Comments
Posted by Pieter de Villiers | October 9, 2008 - 10:52pm
The unexpected news today that Verizon is introducing a staggering US$0.03 ‘tax’ to all Mobile terminated SMS starting October 01, 2008 has the industry and partners stunned.
Aggregators and their investors have for the past 5 years invested hundreds of millions of dollars to help create, establish and grow the Application – to – Person SMS ecosystem (Example: Clickatell’s Mobile Banking Alerts) a market that the Carriers were not focused on as their priority was with the Person- to – Person SMS and voice services. The Enterprise SMS market has many critical application ranging form Emergency alert services such as those used by the US government for natural disasters and terror warnings to those used by banks to provide fraud alerts, this is a very unfortunate strategy by Verizon and will impact all stakeholders.
Posted by N. Nesral | October 9, 2008 - 10:53pm
Carrier Extortion?
Audacious but anticipated move by Verizon. The wireless carriers do have every right and fiduciary responsibility to not only cover their network costs but earn a ROI...BUT...$.03 per MT...extortionary! The decimal for this fee should move to the left at least one ($.003) if not two ($.0003) places making room for the additional zeros that belong in a fair market rate. Additionally, to apply this fee on top of the already onerous revenue share of 35% to 40% that Verizon and the other carriers take on off-network premium transactions is mind blowing. Some questions:
1) Verizon: Is this a burden shift...are you going to reduce your consumer fees or is this a component of your plan to cover the debt exposure of your Alltel acquisition?
2) Verizon: Are you going to reduce your revenue share on premium transactions? Are you going to allow open alternative payment options so that off network content providers can explore opportunities to salvage their already ridiculously thin margins?
3) Senator Kohl (Chairman - Senate Judiciary Antitrust subcommittee): What are your and the other subcommittee members' opinions regarding this matter? When the other carriers impose similar fees at the same cost level in the weeks to come are you going to explore the collusive nature of our wireless oligopoly in its dealing with the off network content/media sector of this market?
There needs to be a reaction, a counter offensive to this move that to some companies in this market, start ups in particular, is an act of economic genocide.
Call to Action: Google, Microsoft, Yahoo, NBCU, others of means and might...step up and confront this assault! Provide quarter to those in this ecosystem who cannot defend themselves from the carriers. Google, in particular, "DO NO EVIL"...standing on the sidelines of this one is in contraction to your mantra.
Please help....
Posted by Anonymous | October 10, 2008 - 2:45pm
who exactly are they charging this to? OpenMarket? Verizon cant charge me for an MT unless I go direct. If you go direct their is no charge for MT's...Im confused...
Posted by Anonymous | October 10, 2008 - 2:50pm
I think Ill add a Verizon tax to my clients invoice. from here forward. Much like the different BS handling fees every company is starting to charge. Its a Vtax from here forward.
Posted by Joe | October 10, 2008 - 4:26pm
What if Verizon blocks the text message, as it did last year for pro-choice groups? Will the blocked party still have to pay the tax for attempting to send the message?
Posted by Anonymous | October 10, 2008 - 4:51pm
Just to be clear, Verizon Wireless is applying this fee to all mobile terminated messages that are sent to its customers by application providers and thereby impacts the aggregator ecosystem (Open Market, Sybase 365, Verizon, Syniverse) because these latter firms connect app providers to the carriers. This arbitrary $0.03 surcharge may put small application providers out of business but it does not have direct impact on consumers' pocketbooks as they do not currently absorb the cost of MT messages (only MO).
Posted by Anonymous | October 13, 2008 - 1:08pm
There's only one reason Google, YHOO, Facebook, et al would keep quiet on this matter. Implicity collusion.
If big web properties have negotiated direct binds and sweetheart deals for free or very low-cost MTs, then they too have an interest in driving small mobile content companies out of business to preserve their own long term interests.
Posted by Anonymous | November 18, 2008 - 6:55am
"If big web properties have negotiated direct binds and sweetheart deals" - that would be against the law, wouldn't it? The operator has to offer the same terms to everyone. If some big content partner gets a hefty discount on the volume of messages, it is acceptable and legal as long as any other company san get the same terms for the same volume.
