Cell C bullied on SMS plans: Knott-Craig

Cell C CEO Alan Knott-Craig says that the operator is being bullied by the incumbent operators (Vodacom and MTN) into accepting interconnect on SMS.

This follows Cell C’s decision to break a “gentleman’s agreement” between the mobile operators to not allow bulk SMSs to be sent to other operators.

There was previously a “gentleman’s agreement” between Vodacom, MTN and Cell C not to compete on A2P SMS messaging.

What this meant was that Wireless Application Service Providers (WASPs) which provided bulk SMS message sending services, had to send all their Vodacom messages via Vodacom, MTN messages via MTN, and Cell C messages via Cell C.

This “gentleman’s agreement” resulted in higher SMS prices for A2P SMS messages, benefiting the network operators and the WASPs, but negatively impacting on the communication costs of businesses.

Cell C broke this “gentleman’s agreement”, and began allowing all WASPs to terminate A2P SMS messages onto other networks.

Introducing an SMS termination rate

Cell C’s decision sent shockwaves through the bulk SMS industry, which was aggravated by the operator’s alleged decision to give preference to one WASP for bulk SMS rights on its network.

The impact was so significant that there is now a plan to introduce a wholesale termination rate (aka interconnect rate) for SMSes. It is currently free to terminate an SMS on any South African network.

Cell C is not happy about this plan. “Cell C is being bullied into accepting interconnect on SMS,” said Cell C CEO Alan Knott-Craig.

Knott-Craig added that the operator will only support an SMS interconnect rate under three conditions:

  • Firstly, the rate must reflect the actual cost of terminating an SMS;
  • Secondly, the price to consumers cannot increase due to this new cost;
  • Thirdly, there must be asymmetry for smaller players.

Cell C is not alone in its unhappiness about a potential SMS termination rate.

8ta said that it does not support the implementation of an SMS termination rate of person-to-person SMSs – between mobile operators’ customers – where such arrangements are reciprocal.

Vodacom would not say whether it supports an SMS termination rate. “We’re exploring a number of options so it’s difficult to give a straightforward yes or no answer,” said Vodacom spokesperson Richard Boorman.

MTN did not respond by the time of publication.

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Cell C bullied on SMS plans: Knott-Craig