Nov 23, 2009

SMS - Telecos next Turf for Price War

Looks like while every one was fighting to cut the price per voice call, no one realised how costly sending a SMS became in comparison to a voice call is. About 10 years ago, when mobile operations began in India even incoming mobile calls were charged. And today both the price as well as duration for payment has hit measurable limits (1 paise per second). But even in this tumultuous time, the price per SMS had just remained the same. one rupee per sms.

But if todays article in Times of India (SMS Prices set to crash) is to be believed, the fight between the operators will soon shift from voice to sms. After all SMS is the second most used service after a voice call. It would have been anybody's guess that SMS prices are going to crash next. In fact the recent unilateral SMS interconnect charges imposed by Airtel would have been a direct cue to TRAI to wakeup and regulate this medium. Moreover the lobby of SMS aggregators was gaining momentum to bring some order here.

I find that article in Times of India quite funny though. Times of India, in its typical style of saving the world, expounds on how it exposed the obnoxious price of a SMS to the world. Having seen its report, how TRAI jumped into action and is going to bring out a regulation as soon as it could. The description of measuring the cost of a SMS by its data size and time to transmit over the network makes the article only funnier.

Humor aside, I think this news should be a respite to all those companies providing services around SMS'es. The cost of an Application sending a SMS to user was fairly low. As a result we saw a lot of innovative applications such as mobile alerts, advertisements on mobile, emails on mobile etc being born. But the problem was that the communication was usually only one sided. However, if the price of SMS sent by user also drops, it will create space for more feature rich interactive applications.

I can definitely see more people using the SmsTweet application (updating twitter status by sending sms) if the price per sms drops. I can make it more interactive by letting users download their friend's status on their mobile phone.

What is your opinion? any nice ideas around SMS?

(Picture Credit:


chaman raj said...

Application having SMSes as its core will definitely be a hit. E commerce websites can use it in innovative ways. Like someone at a physical store wants to know whats the price of ipod at an ecomm store. He can send a sms and gets the price through sms. if the customer finds out that in online store price is cheap..he will not buy frm physical store...i.e extending the search feature to mobile by use of an application.

What do u say?