US aggregators stunned at Verizon’s $0.03 MT transaction fees increase

The US text message market is in a bit of flux.

I’ve been getting phone calls and text messages from aggregators across the country who can’t quite believe that, from 1st November 2008, Verizon will apply a $0.03 transaction fee on every outgoing text message through it’s network.

I can’t quite believe it either.

It did cost roughly $0.01 if you bought in bulk.

Now, er… now it’s going to be $0.04.

And if your business plan doesn’t have much flexibility, screw you.

Screw you with bells on.

I was forwarded this email — reportedly from leading US aggregator, OpenMarket, by multiple folk:


Verizon Wireless to Start Charging for Messaging Fees

Dear OpenMarket Customer:

Effective November 1, 2008, Verizon will assess a transaction fee of $0.03 for every MT message processed on its network. Please note that these message fees will apply to standard rate and premium programs. Transaction fees will not apply to Free-2-End-User, Mobile Giving, or Non-Profit organizational programs.

Pursuant to your Commercial Services Agreement with OpenMarket (including former Simplewire Agreements) concerning Third-Party/Operator Fees, in the event message fees are assessed by Verizon for any of your programs, these fees will be passed on to your company at cost.

Please forward any questions or feedback to your Account Manager.



I see that RCR Wireless carried a piece on this issue quoting the same email earlier today.

What the hell are Verizon thinking?

There’s a heck of a lot of mobile services utterly, utterly dependent on low cost text messaging costs.

A few sample quotes from (understandably anonymous) US aggregators that I called this evening:

“It’s absolutely appalling!”

“I cannot believe they’ve done this.”

“I reckon perhaps 15 of our clients will stop their services as a result of this cost increase.”

Those same aggregators are, to use the American term, ‘pushing back’ on Verizon. That is, they’re not sitting back and taking it in the neck like OpenMarket appear to have done.

Dead right.

Complain. Cajoule. What ARE Verizon thinking?

I know you have to ‘keep the lights on’ but surely a 3 cent rise is just silly. If you are running at a huge loss, sure — tell the marketplace. Advise them. Let them know that come 2009 you’ll need to increase per-message MT costs by $0.01. Then by another $0.01 in July 2009. And finally another $0.01 by December 2009. A staged increase is a lot more sensible — if you HAVE to make an increase.

Or, perhaps Verizon are hoping to kill of MT text traffic in favour of data. Email, for example.

What’s your viewpoint?

How would you feel if Vodafone UK increased their interconnect/MT fee by £0.03 from next month?

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