Twitter May Face Huge SMS Bills

In the good ol' United States of America, the receiver pays the SMS bill. In Canada, Australia, Europe and I believe much of Asia, the sender pays. For Twitter, this may add up fast.

If you spend some time on Twitervision it's obvious that Twitter is a global phenomenon. The site is popular around the world. Further, use mushroomed in the last few weeks.

So unless I am missing something, Twitter faces a massive SMS bill for all of the messages it has been sending out to users outside the US. Perhaps I am wrong. Maybe because they are US based our rules apply. If you're an expert in this area, please weigh in.

Further, from the looks of it no part of the site is monetized right now. So add this all up and it could mean big trouble in Twitterville. Please do correct me if I have this wrong.

Comments

[Tama]

I'm Twittering from Australia and I was as the sender most certainly pays the SMS bills I was amazed at how may SMSes I was getting in one day once I had a few dozen Twitterati on my list!

From the sort of messages I've seen, I suspect one of the main reasons a lot of Australians use Twitter is to send free text messages to friends! At 22c per message to send on many plans, Twitter would have a bill of something in the realm of $10-15 a day just from your Twitters and Scobles coming to my phone!

[Howard Scott]

From what I understand in Europe at least the sender pays the SMS bill because it's impossible to refuse receipt of an SMS - it automatically gets delivered to the phone. Unlike a phone call, where you can choose not to answer a call. If Twitter are located in the US, then i suspect they've struck a deal with an SMS provider to cope with this - it's not the sort of thing you would set up a company doing and not have taken into consideration (I would hope!)

[Matt Deegan]

I would of thought that Twitter is paying for all of these texts they're sending out. I'm sure it's likely to be a bulk deal though, which gets the price down to 3p/4pm 1.5/3cents a message. That still adds up to a lot of pennies!

In the UK sending to a shortcode (as many twitterers do) can incur bounceback charges (25p+standard network rate) - they don't seem to be doing this, but is an option later on I guess.

[Connie Reece]

Steve, are there are any stats available regarding how many users send/receive via the Web as opposed to SMS? Even on my mobile I use the browser for Twitter rather than SMS -- because I have an unlimited data plan but pay per text message. (I'm in the U.S.)

[Joe Taylor Jr.]

From what I understand (working with musicians that use a LOT of text messages), you pay when you're on the cell network, but you don't have to pay to send text INTO the network. For instance, you can send a text message via an e-mail gateway to a cell phone, and the recipient pays. Likewise, I can send an SMS from my cell phone to an e-mail address, and I pay. Unless I've got the foresight to request an unlimited SMS plan ($20-$50, depending on your carrier), I'll get dinged for 10-15 cents for every message in OR out. Twitter, meanwhile, won't have to pay a thing.

[/pd]

why would SMS be charged to twitter if they are using an emaily gateway ?? I Agree with Joe Taylor.. that must be the current model.

[Neville Hobson]

Here in the UK, only the sender pays the SMS bill. (That's for text messaging: different picture if you send someone a multimedia message. Pun not intended, btw!)

I've not been able to get SMSing to Twitter from my mobile phone to work at all - every time I send to 40404, nothing appears on Twitter. 40404 in the UK does work according to Twitter, so I'm very willing to accept it's something I'm not doing right rather than a Twitter error.

But if you're right about costs, Steve, Twitter's in trouble.

[Kosso]

Neville, from the UK you use a different number - +447781488126

[Jonathan]

Steve - I'm not a real expert, but I believe that in the US, any middleman (in this case, Twitter) has to purchase and pay for every single SMS that goes through their system. If messages are going through Twitter as true SMS (not via a SMTP gateway) and use a shortcode (as it appears Twitter does), then Twitter has to pay for every message it sends. In other words, if you post a Twitter message via SMS, you pay--then Twitter pays to send that message to me via SMS--and then I pay to receive it. In this case, all 3 parties pay the carriers (not bad for the carriers).

The difference is that Twitter can negotiate a bulk rate and get a lower per-message fee than we individuals can. But in the end, Twitter has to pay for every message sent through their system, unless they use SMTP.

I would be very, very curious to know if they're using smtp (which I doubt) and if not, what their SMS costs are each month.

Please chime in if anyone believes I'm incorrect. I'm no expert.

[Kosso]

I was thinking along these lines a while with a friend. There's what looks like a very easy to use and develop system here to handle SMS for you. Their pricing is all there for you to work out what Twitter's costs might be

http://www.tm4b.com/sending-sms/

[engtech]

Now I feel kind of bad for using Twitter for RSS broadcasting.

http://engtech.wordpress.com/2007/03/22/howto-twitter-rss-broadcast-feeds-twitterbot-guide/

[LiewCF]

I am new Twitter member from Malaysia. In Malaysia, we pay for sending SMS but not pay for receiving SMS. I was surprised when receiveing twitter message via SMS. "who fund twitter?", I wonder.

[nicco]

I have a 3 mobile - Italy - and I can't receive the twitter SMS, damn'!:))
I'll try again!

[Sanford]

Funny - and I have been noticing the slowdown in twitter - which has been impacting my sites - and had to come up with a workaround for my twitter broadcast interface. Check out the post on politicalwarez.com. Too funny.

[Mack D. Male]

I'm in Canada, where the sender pays. I am with Telus, and I pay $10/month for unlimited text messaging. I can send as much as I want! It's a good deal.

[Jon Gales]

The way companies like Twitter send SMS is through a middleman who
has connections at all the major carriers. Examples: Mobile 365,
Simplewire or Mblox. From the messages I have received it doesn't
look like Twitter is using one of the email gateways. That makes
sense considering the volume (1 update from Scoble can mean hundreds
of messages). Usually you can tell when someone is using an email
gateway because they ask what carrier you are on (Google Maps for
example).

It's not an inexpensive business in any respect, not even counting usage the
40404 short code alone costs $1,000 monthly to lease. I looked up
pricing on Simplewire's site since it looked like the best fit and it
appears there is an unlimited option. I didn't fill out a request,
but it is on the form. So it's possible they are paying a flat
monthly fee, albeit a high one.

[Oakley]

I have reason to believe Twitter have a deal with T-Mobile for mass SMS use. Similar business deals with other networks mean messages can be sent for as little as 10 pence (around 20 US cents) per 50 messages. Quite a saving, considering the average consumer would pay around £6 (12 USD) to send the same number.

[SEO Mash]

I was reading about SMS short codes recently and the article stated that in the US, carriers charge small players a fee for each message delivered to their gateway which is to be delivered to the end user. However, once you become a big player the tables turn and the carriers actually pay the originator for each message delivered to the gateway because they are making a tidy sum by delivering the message to the end user. So for the carrier it is basically a win or a win-win situation and for Twitter could also be a nice money maker. Not sure how the non-US market works.

[Rodrigo Guaiquil]

Here in Chile, the sender pays the bill, about 9c per message with or without plans, and 25c for MMS. But few people know Twitter, so still there is no danger of massive SMS use for free in Chile.

[Owen Jacobs]

"In the good ol' United States of America, the receiver pays the SMS bill"

I still consider this a crazy concept (and the same for voice calls). It's like someone knocks out your teeth but you have to pay for the dental job.

[Geoff]

The UK number - +447781488126 is apparently based in Guernsey. When I was with Orange the number was included in my monthly text allowance. However, with 3 its charged at 21p per text.
I used Twitter a lot in personal mode to text my girlfriend in the UK when I was on my computer in France. All for free

[brendadangelo]

I've not been able to get SMSing to Twitter from my mobile phone to work at all - every time I send to 40404, nothing appears on Twitter. 40404 in the UK does work according to Twitter, so I'm very willing to accept it's something I'm not doing right rather than a Twitter error

[brendadangelo]

I've not been able to get SMSing to Twitter from my mobile phone to work at all - every time I send to 40404, nothing appears on Twitter. 40404 in the UK does work according to Twitter, so I'm very willing to accept it's something I'm not doing right rather than a Twitter error

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[hank mitchell]

NO NO it is sent via email gateway - there is no charge because the hosts translate it to sms for you. thats how my site works anyway. you only get charged is sent from the handset, otherwise its any old email!

[Jon Gales]

Hank, because your site uses an email gateway has absolutely no relevance on how Twitter works. Common sense would dictate that they are not using an email gateway... You can't send multiple emails per second without getting banned.

Notice how on your site you ask for the carrier and Twitter doesn't. That's because you use the public email gateway and Twitter doesn't. Notice how your messages come from an email address and Twitter's come from a phone number.

[hank mitchell]

ahh, interesting - i have seen sms software for sale that can do twitter like sms ing.

good to know!

[Jon Gales]

Go back up and read my previous comment, there are companies that provide a single interface to all the major carriers in the world. They have direct connections into their systems and can handle volume requests. You can do things like. "send this message to these numbers" to send 500 messages instead of having to go through a loop and connect to each network, send a message, disconnect and repeat.

You can try and fashion these partnerships yourself, but most carriers won't want to talk to you since it's easier to deal with a few middlemen who handle billions of messages a month than it is to deal with thousands of relatively small time operations. Interestingly, the carriers themselves use middlemen like this to do cross carrier messaging.

[Erik Schwartz]

Twitter does not terminate SMS via the email gateways in the US, they have a short code and a relationship with an SMS aggregator.

It would be typical for Twitter to be paying about $.02/SMS terminated. For example, if I have 50 followers, Twitter pays their aggregator $1.

Of course the carriers also get paid on the other end too.

I blogged this last week.

http://foneshow.blogspot.com/2007/03/pondering-economics-of-twitter.html

[Zhasper]

I'm in Aus...

I was getting sms twits nice and regularly, but about two weeks ago they stopped. Three days later, I got a flood of about 260 smses over 8 hours (from the prior three days) - then nothing again. The burstiness continued till about last Thursday, but since then I've had nary an SMS.

I don't know if this is a Twitter issue, or my provider filtering, but I do know that Twitter is pretty much pointless when I'm not getting SMSes.

[Ederic]

I'm from the Philippines, and I have never received any twitter updated directly from Twitter. I had to use another service to be able to do it.

Btw, the sender pays for the SMS sent here.

[Daniel Scoullar]

Did you ever find out who pays for sms messages from twitter and others (like Google Calendar) outside the US?