US: Litigations force Text cost hike

[El Gringo]

http://www.wirelessweek.com/article.aspx?id=163616
October 10, 2008

The cost of sending text messages to Verizon Wireless customers is going up, and some in the industry fear other operators will follow suit.

A Verizon Wireless spokeswoman characterized the move as something the company needs to do as part of business, but content providers and aggregators are concerned the rate increase will cause brands and marketers to ditch mobile in favor of cheaper, more traditional alternatives, like e-mail.

“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,” said Steve Livingston, chief marketing officer at SMS aggregator mBlox, in an e-mail. “The mobile channel will quickly become unattractive to many companies, small and large, that have been investing in new innovative programs and services.”

i thought this was odd at the time when i first read it. we know in Europe that the cost to network operators to deliver text messages is almost zero. so why does Verizon (Vodafone) propose to increase the charge to aggregators from 1cent to 4cent/text ?

http://www.rcrwireless.com/article/2...being-digested
VZW’s proposed text-fee increase still being digested
October 20 2008

“I think what we’re beginning to see is higher costs in terms of monitoring messages, costs around litigation — the feds are getting involved — the costs of building out networks, costs of bundling vs. per-transaction charges,” Marriott observed. “All of these inhibitors need to be considered.”