Verizon to Hike Bulk SMS Pricing

On Thursday, Verizon Wireless announced that it would be raising the cost of SMS messages $0.03 for bulk or "Mobile Terminated" (MT) SMS messages. These are the types of messages you might receive if you subscribe to updates from a political campaign, or from a service such as ChaCha and 4INFO.

The fee would be in addition to current MT fees, which typically cost the sender anywhere from a fraction of a penny to a few cents.

While these are bulk SMS messages, meaning, it wouldn't affect you the consumer in terms of your direct SMS cost, it sure as heck would affect any companies using SMS for alerts and other information, and might force them to stop sending messages to Verizon customers. While $0.03 sounds like nothing, when multiplied across the number of messages these companies send, it becomes huge. This is no ROFL-ing matter.

For Verizon, it's just another way to make more money. But to some of these companies, it could be the death knell.

Steve Livingston, chief marketing officer of mBlox, a leader in SMS aggregation, said in an email:

"This recent announcement from Verizon is very significant because a large number of market segments will no longer be able to participate in off-portal SMS services. Although we understand the carrier's need to monetize, the immediacy, the market timing and level of cost will create a shock to the system. The mobile channel will quickly become unattractive to many companies, small and large, that have been investing in new innovative programs and services."

4INFO CEO Zaw Thet estimated that the added cost could amount to as much as a 50-fold increase in his company’s cost of delivering SMS messages to Verizon users.

"It came completely out of left field. I think this means we will no longer be able to support Verizon customers."

Interesting timing for the move. In the wake of industry-wide doubling of text message costs over the last three years, Congress has taken an interest. At the beginning of September, Sen. Herb Kohl, chairman of the Antitrust Subcommittee of the Senate Judiciary Committee, sent a letter to the four major wireless carriers (AT&T, Verizon Wireless, Sprint, and T-Mobile) asking for an explanation for the dramatic price increases.

I think it's clear why: carriers have noted the huge rise in SMS popularity and decided to cash in on it. And at the same time, the worldwide financial crisis obviously means Congress is a tad bit busy nowadays.

Verizon's price increase will take place on Nov. 1st.