Clickatell Remarks on Recent Attention to Growing US Text Use and Increasing Rates
Consumers Bear the Real Cost Burden as US Carriers Raise Prices
CTIA Conference, Moscone Center, San Francisco, CA, September 12, 2008 – Clickatell, leading mobile message provider, comments on the recent coverage regarding Wisconsin’s Democratic Senator Herb Kohl’s letter to the top four US wireless carriers noting that text-messaging prices have increased 100% since 2005.
Around the world, cell phone customers rely greatly on text messaging, second only to voice. In June 2008, US carrier networks transmitted more than 75 billion text messages, but unlike most countries around the world where SMS pricing has dropped over the past several years while carriers see increased revenue– a win-win for consumers and companies alike—rates in the US continue to soar.
Another ‘anomaly’ in the US SMS market is the charge for incoming text messages that phone users have no way of preventing. The four carriers mentioned in Sen. Kohl’s letter operate free email-to-SMS (firstname.lastname@example.org) services that allow marketers to send unsolicited text messages to any mobile number; as a result the recipient is forced pay for these messages and cannot ‘opt out’ of email initiated communications.
“It makes sense for the sender to pay - it would discourage spammers because they would have to foot the bill,” says Pieter de Villiers, Clickatell CEO. “Additionally, a new model from these carriers would protect consumers. People may still receive unwanted mobile messages, but they would not be forced to pay for them. This change in the mobile messaging model is crucial, especially as costs continue to rise.”
To allay consumer agitation over recipient charges for text messages, carriers have introduced a ‘short code’ program in which companies utilizing SMS must pre-approve application-2-person messaging programs such as sports alerts, balance alerts, etc. But this novel concept only resulted in a ‘bottleneck’ that is continuing to stifle innovative services instead of addressing the real problem of ‘receiving party pays’.
Other countries are getting it right and have dealt with premium rate SMS abuse through independent industry self regulation and best practices peer review. The US has an opportunity to avoid previous mistakes. Around the globe, people love SMS technology and happily pay when they initiate the message or have opted-in for a desired service. And, companies are launching new text services daily – not offering peer-to-peer chat, but important business-to-consumer services. Banks, governments, social communities, public schools and universities, and other enterprises are deploying mobile text messaging for critical communications including financial alerts and notifications, life-saving disaster response services, “child not present” alerts, campus danger notices, and other ‘piece of mind’ services.
“SMS is a life-changing technology, and the stake-holders in the industry need to ensure the sustainability of the important service through consumer education, modified pricing and responsible practices. The next topic we need to address is premium SMS -- charging higher rates for luxury items such as custom content,” noted Pieter de Villiers. “Although organizations have the right to offer these services, it’s widely known that consumers, especially teen-agers, end up paying for products and services, such as ring tones, when they did not understand what they were ‘signing’ up for.”
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