Telcos Double Corporate SMS Rates for Foreign Entities

Sources report that from July 16 onwards, Indian telcos will charge $0.030 per Corporate SMS from foreign entities. This move might force some of the affected entities to look elsewhere.

Telcos Raise Prices of Corporate SMS

Sources reported that the telcos will charge overseas firms operating in India $0.030 per SMS from July 16. Incidentally, the new rate is double the current rates and is almost 20 times higher than the rate domestic companies. pay the telcos. Industry executives report that this move will force the telcos to look for their options as the prices go higher and higher. Companies like Amazon, Google, Facebook will face the brunt of the increased corporate SMS rates.

There are some options that these foreign enterprises can go with. There are always in-app notifications. Apart from that, emails and WhatsApp Business Messaging are good options. However, this still translates in higher revenue for telcos as they will still deliver mission-critical messages such as OTPs for the telcos.

A telemarketing executive, cited by ETTelecom, said, "the price increase will cause some reduction in traffic. For instance, most foreign banks have top tier customers who are regular users of WhatsApp and email".

They also added, “more than 40 billion SMSes are sent by domestic entities per month as compared to one billion by foreign companies, which is now expected to come down".

Another person, a telecom executive, said that there should not be any significant dip in SMS traffic. They said that international enterprises are already paying double the new prices in some market. As such, these companies can easily cope with the new corporate SMS rates. That does not stop these foreign entities from being upset, however. Some of these companies argue that they are wrongly categorized as 'international' despite having full operations within India.

Why the New Corporate SMS Pricing?

There is a short answer to that - to increase the revenue.

Telcos have been tweaking corporate service plans for the past few months now, sources report. These tweaking includes bundled offerings of bulk SMS, fixed-line connectivity, corporate SIM cards, pan-India office coverage and cloud security. Naturally, telcos are taking actions in a bid to raise revenue. Telcos are trying to push their ARPU as high as possible given the increased competition in the Indian market. What's more, telcos are also pushing hard to gain high ARPU enterprise customers as well.

Recently, Bharti Airtel CEO Gopal Vittal said that the telco has doubled down on its enterprise business. He said that the telco has done so by “retooling” its channels and product portfolio. So far, Vittal reported, Airtel has captured 31% enterprise market share as per December 2020.