Telcos oppose international SMS traffic redefinition

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Tech firms and telecom operators are facing off over steep SMS tariffs, causing one-time passcodes and messages to consumers from abroad to cost several times more than what they cost domestically. In response to a consultation paper by the Telecom Regulatory Authority of India (TRAI), telcos argued that there was no need to change the definition of ‘international traffic,’ a key term that determines what an international SMS is, and by extension, what it should cost.

The Cellular Operators Association of India (COAI) painted companies that routed SMS messages through domestic gateways as getting away from “having to pay the international SMS termination charge,” an expensive add-on to SMS tariffs to deliver text messages from abroad.

How expensive? “International SMS is a lucrative market,” Nitin Singhal, the India Managing Director for Sinch, a firm that provides text communications services to global brands, told The Hindu. “Rates can be 30 times higher than domestic tariffs.” That comes out to ₹1.50 per text, which can work out to an astronomical figure when enterprises are sending out vast volumes of one-time passcodes.

All this while SMS remains an extremely inexpensive service for telecom operators. The disconnect between the price and the cost was most evident when Nigel Bannister, a professor at the University of Leicester, was able to calculate in 2008 that it was less expensive to download data from the Hubble Space Telescope to earth than it was to send an SMS message in that year’s tariffs in the UK.

The Broadband India Forum, which represents Big Tech firms like Amazon and Google as well as Internet Service Providers, argued that insisting on strict geographical boundaries for SMS was inappropriate when it was possible to send an SMS message over the internet to an Indian gateway. “[T]he excesses of international SMS pricing have little to nothing to do with cost of providing service,” BIF said in its filing.

Costly international SMS pricing can also lead to fraud, Mr. Singhal of Sinch pointed out. Firms that use SMS to verify international users have to pay the telco that ultimately delivers the SMS. After Elon Musk took over the social media platform Twitter, he alleged that telecom operators around the world were defrauding the firm of $60 million a year by creating bot accounts that requested bogus SMS OTPs from Twitter, for which the company had to pay.

“I said, cut off any telco that’s got fraud above 10 percent,” Mr. Musk said in an online discussion in January. This coincides with a period where Twitter stopped delivering SMS messages to Reliance Jio and Bharti Airtel customers.

Read the article on The Hindu.