Why the surge in Wholesale SMS pricing.

Blog post author
Written by
Simon Fraylich

In the last year, the wholesale pricing of SMS (ShortMessage Service) has experienced a notable increase, prompting businesses andservice providers to investigate the factors contributing to this change. Toaddress this issue, we have created this blog post, intending to shed light onthe underlying causes behind the considerable price surges observed acrossvarious networks in the past 12 months.


1. Growing Demand and Increased Usage:


The demand for SMS services has been steadily rising overthe years, driven by the ubiquitous nature of mobile devices and the increasingreliance on instant communication. With businesses, organizations, andindividuals utilizing SMS for a wide range of purposes, including marketingcampaigns, transactional notifications, customer support, and two-factorauthentication, the overall volume of SMS messages being sent has surged. Thisexponential growth in SMS usage has put pressure on the infrastructure andresources required to handle the increased load, resulting in elevatedwholesale pricing.


2. Evolving Regulations and Compliance Measures:


The SMS industry operates under various regulations andcompliance measures imposed by governments and regulatory bodies. These rulesare designed to protect consumer privacy, curb spam messages, and ensure fairpractices. However, implementing and maintaining compliance measures requiresinvestments in technology, infrastructure, and manpower. The cost of adheringto these regulations, such as obtaining and renewing licenses, conductingaudits, and implementing advanced security measures, has contributed to theupward trajectory of wholesale SMS pricing.


3. Infrastructure and Network Upgrades:


To cope with the growing SMS traffic, service providers mustcontinually upgrade their infrastructure and expand their network capabilities.Investing in robust SMS gateways, servers, and routing mechanisms is essentialto ensure reliable and fast message delivery. The costs associated withacquiring and maintaining this infrastructure, coupled with the need forredundancy and disaster recovery measures, have led to an increase in wholesaleSMS pricing.


4. Rising Carrier Fees and Interconnect Costs:


SMS messages frequently travel across various networks andservice providers before reaching the individuals they are intended for. Everycarrier involved in this transmission process imposes interconnect fees formanaging and delivering messages over their networks. As the volume of SMStraffic grows, carriers have been raising their fees to handle the increasedworkload and ensure reliable service. These interconnect expenses, whentransferred to service providers and businesses, contribute to the overall risein wholesale SMS pricing.


5. Pressures of international inflation:


Inflation has had a substantial impact on the pricing ofwholesale SMS, leading to significant consequences within thetelecommunications sector. As the costs of goods and services steadilyincrease, the expenses related to operating and sustaining the infrastructure requiredfor SMS delivery have likewise risen. Consequently, wholesale SMS providersraised their prices in order to accommodate these ongoing increased expenses.




The increase in wholesale SMS pricing is the result of a combination of factors, including growing demand and usage, evolvingregulations, infrastructure upgrades, carrier fees, market dynamics andinflation.