The Financial Express
Telecom operators have increased the SMS tariff by 25% for overseas tech firms like Amazon, Google, Meta, and others, for sending messages to their customers in India. The latest hike, which takes the tariff to Rs 4 per message, comes at a time when these firms have been expressing concern that the telcos overcharge them for sending SMS — OTP, confirmation code, order updates — to their customers in India.
Though these firms have operations in India, telcos charge them international long distance SMS rates because their servers located abroad are used to generate messages to consumers in India.
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To avoid paying higher charges, companies like Amazon and Uber have lately reduced their volume of SMS and instead started communicating using their own apps or emails to communicate with their customers.
Emails sent to Bharti Airtel, Vodafone Idea, and Reliance Jio regarding the recent hike in international SMS rates did not elicit any response till the time of going to the press.
“SMS is a reliable and trusted mode for an organisation to communicate with their clients. If the telecom operators keep on increasing the SMS tariffs, then suddenly we will see a sharp dip in volume of SMSes from companies as they would resort to options such as WhatsApp, their own apps, or emails,” an official at a telemarketing company said.
Companies use services of communication platform as a service provider (CPaaS) players or telemarketers for sending bulk messages to consumers. According to industry estimates, over 1 billion domestic commercial messages are sent every day.
“We don’t see much of a dip in volume with the recent tariff intervention. We are able to maintain our customer base. But yes, if the price keeps on increasing in multiples, there might be some use cases which may get stopped by the enterprises,” said Rajdipkumar Gupta, CEO of Route Mobile.
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A crucial factor which contributes to the added rates for international SMSes is the forbearance on termination charges, meaning telecom companies can charge each other any rate when a message sent by a foreign entity terminates on their networks. For domestic transactional messages, the Telecom Regulatory Authority of India (Trai) has specified the termination charge of 5 paise. Overall the domestic SMS charge comes around around 9-15 paise for commercial entities.
Amazon and others have urged Trai to instruct telecom operators to levy domestic rates on them as their server is in India and they have an Indian subsidiary, which serves Indian consumers. However, according to telcos these companies host their applications outside India which is used to communicate with servers located in India and therefore international rates should be applicable to them.
Lately, Trai has also floated a consultation paper with regard to definition of international traffic. The authority has noted that the term ‘international traffic’ has not been defined in the unified licence. As ‘international SMS’ is a type of ‘international traffic’, the authority is of the view that instead of defining international SMS in the unified licence, it would be appropriate to define the term ‘international traffic’.
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