SMS Marketing Industry News

US Wireless Carriers Ban Premium Short Code SMS Billing

Dec 12, 2013

Make it rain

Recently three of the major U.S. carriers — AT&T, Sprint, and T-Mobile entered into an agreement with 45 states to stop billing customers for premium short code SMS messaging. This is fantastic news for brands running standard rate messaging campaigns, as consumer will no longer be concerned that they may see additional charges on their next wireless bill simply because they engaged an SMS campaign. 

Just how big of a problem did premium SMS messaging become in the United States before the carriers agreed to ban it? It’s estimated that every year, premium SMS billing costs consumers nearly $2 billion in additional charges on their wireless bills. Considering that there’s 326.4M wireless subscribers in the United States, that means that on average, each wireless subscriber was paying an additional $6/year in just premium SMS fees. What are you going to do with all the money you’re going to be saving in 2014? I know what I’m going to be doing, I’m going to treat myself to a quesarito.

While a timeline for implementing this ban on premium SMS messaging wasn’t discussed, my sources are telling me that by the end of January 2014 you’ll see the majority of premium SMS billing stopped. As stated above, the sooner this happens the better it will be for brands running standard rate messaging campaigns, but lets be honest, it will take some time for consumers to be educated about these changes, and until that happens I predict we’ll still see continue to see consumer hesitation when engaging with SMS campaigns.

Obviously with everything there’s always exceptions to the rules, and the exception here is for SMS donations and political donations, as the wireless carriers have said they won’t ban premium SMS messaging for these purposes.

It is noted that Verizon didn’t enter into the agreement with AT&T, Sprint, and T-Mobile, but they have publicly stated that they’re “in the process of winding down its PSMS service”.

 


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