SMS Providers Already Threatening To Cancel Services To T-Mobile Customers

Yesterdays reporting regarding T-Mobile and their plans to increase the cost of third party text providers has already prompted at least one company to threaten to bar message alerts from T-Mobile. Cha Cha, a leading provider of answering any question you can ask it via text has publicly stated they would “drop T-Mobile from our service.” Accusing T-Mobile of “triple dipping,” Cha Cha, which counts T-Mobile as 12% of their service or close to 125,000,000 messages per year, is up in arms. Cha Cha is the 6th largest US SMS sender behind expected heavyweights like Twitter, Facebook and ESPN.

ChaCha’s statement:

If T-Mobile moves forward with its “twitter tax” that is rumored to begin on Oct 1st, ChaCha absolutely will drop T-Mobile from our service. T-Mobile is a carrier that doesn’t understand the realities of content businesses including Facebook, Twitter, ESPN, and ChaCha. ChaCha has more than 15 million monthly unique users for whom we answer over 2 million questions every day. The vast majority of these answers are delivered by SMS text. Subscribers for these texts are already paying t-Mobile and they are paid something already by aggregators/publishers. Now, they plan to impose an egregious and unacceptable tax.

Given that the costs to deliver text are miniscule, T-Mobile already makes profits from what they charge their customers, aggregators, and publishers. There, T-mobile is “triple dipping.” We don’t see any reason for this, other than greed.

This will be unfortunate for T-Mobile users who will either need to switch to another carrier to enjoy texting services, or access similar services via the mobile web and/or mobile apps (for which T-Mobile gets nothing incrementally). Starting today we will make it clear to our T-Mobile users that ChaCha would still be available on other carriers and/or via the mobile web or mobile apps.

If T-Mobile moves forward they will give their subscribers reasons to consider other carriers and/or prevent defectors from AT&T/Sprint/Verizon from considering T-Mobile. Also, their proposed pricing move will completely stifle innovation in the space, further harming T-Mobile customers.

ChaCha knows that our real-time “answers” and dbase of billions of answers is valuable and can be leveraged within any of these platforms. We prefer that T-Mobile not take this step, but if they do, we will no longer provide our free SMS service to T-Mobile and shift the traffic to other carriers and platforms. It’s unfortunate for T-Mobile subscribers since they will miss out on ChaCha and many free services because of this short-sighted move by T-Mobile.

TechCrunch also received a reply from 4INFO, a leading provider of sports scores, horoscopes, celebrity gossip etc…and also among the top 6 in SMS providers in the United States. While 4INFO didn’t take the same stance as Cha Cha by promising to outright cancel their services to T-Mobile customers, they did express disappointment and concern that their publishers which includes super heavyweights such as Yahoo, the NBA, USA Today, NFL, NBC and The Weather Channel just to name a few might be forced to cancel the service in the future.

Both companies make a point to admonish T-Mobile for this move and express that the increase in price, while small has lasting implications when you consider that billions of messages are sent to tens of millions of consumers each year. The bottom line is I think both of these companies have expressed their disappointment publicly regarding this matter and hope that T-Mobile reconsiders prior to the October 1 start date.

TechCrunch

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  • Jared

    With more and more phones boasting better internet services and applications these companies are starting to become obsolete anyway. T-Mobile should stick to their guns on this one the companies that do stick around will be more revenue while the ones that drop T-Mo customers wouldn’t have been more money anyway. Not like some chump is gonna leave T-Mobile because he can’t get their horoscope over a text.

    • getreal

      Totally agreed. Go ahead and let Chacha cancel. What moron uses it anyway? It will just be another bad idea company gone. I can fire up google with voice recognition and find out any answer quicker than chacha anyways.

      • juristy

        amen.

  • daniel

    I guess I am failing to see what the big issue and why people are trying to make T-Mobile the bad guy here. All these services aren’t doing this for free and for the good of the people (Like 911 or Amber alert services). KGB charges a $1, I am not sure if this chacha charges or not, but I am sure they make money on advertising. Felix Investments values Facebook at 11 billion dollars.

    Basically for yrs these companies have been able to make their business virtual and have opperated ‘rent free’.

    What T-mobile has done is said,’We want to charge you some rent to opperate in our shopping mall with millions of customers.’

    Plus then with some of these 3rd party companies that charge for their text, usually call customer care and complain about the charge and t-mobile eats it.

    I can’t believe AT&T, Sprint and Verizon, will pass on the chance for the extra revenue that this would generate.

    At the end of the day if I was twitter, facebook, chacha, KGB… etc… I would just chalk this up to another cost of doing business. The free ride was awesome while it lasted, but we have to pay now…

    • Dee

      There was NEVER a free ride, ChaCha and 4info already pay Tmobile something… they are just hiking the price up for the little guys and the little guys only… the heavyweights like Facebook and Twitter (both billion dollar companies) prices will not increase…

      Like i said, it’s like you and a billionaire go shopping together buying the same exact thing but you have to pay 10X more than he does. How fair is that?

      It’s like taxing poor people while the rich keep getting richer.

  • http://Tmobile Paul

    This is a complete rumor and is absolutly false. We recieved information from corporate confirming that is is completly false and it is a rumor. Rest assure your access to social media and terrific mobile apps and content will not be impacted. There will also be no impact to your messing plans. Any Internet rumors to the contrary are just not true!

    • Terri Knoll

      We’ll see if you are whistling the same tune on Oct. 1st.

      Read the history on ChaCha. Scott Jones knows what he is talking about as do Tech Crunch and Mashable. Watchdog groups in Washington are also keeping an eye on it. Don’t bury your head in the T son.

  • VeggieBurgerGuy

    In my opinion, this was not the best move T-mo could make. To me, this moves makes T-mo look desperate, as if they are scrounging for revenue by fishing for pennies.

  • Jesse

    To me and every customer that calls in claiming I never requested these services so why am I being charged $9.99 a month for it… I’d say this is a great thing for Tmobile to do. Its rediculous that this is 40% of the calls that we receive due to customer dissatisfaction from these charges. I think this will put a stop to a lot of these charges.

  • HeLLkAt31

    I feel we are only getting one side if the story here and we are missing Tmobiles side. If you think about it since phones have been ivolving into web internet base mini laptops more and more. Do we really need info over a txt?… And besides this would probably get rid of telemarketers that charge you for a txt you dont want in the first place, now if Tmobile can charge those damn numbers with off the wall area codes…

  • David

    I wish it was true, its on our streamline corporate website that its just a rumor. Its a real pain when people walk into our store mad about their bill being high and more than 75% of the time its because they got subscribed to these crappy services….cha cha should be tah tah.. as in see ya!

    • themetatron

      every account should have content blocker by default, so if it’s removed the cx is warned about these potential charges. tired of people claiming they didn’t know, ignorance is not an excuse.

    • juristy

      I work in T-MO customer care and I have no information that says anything about this. RUUUUUMOR.

  • Dee

    I don’t understand why Tmobile allow the big guys like FB and Twitter to direct connect and get a cheap deal with them, but the little guys who are struggling to survive, they raise the price up? ChaCha and 4info aren’t complaining that they have to pay, it’s that they have to pay MORE than Twitter and Facebook.

    It’s like you’re going shopping, and the guy who has more money than you can buy the same exact thing as you, but you have to pay 10X more than the rich guy… is that fair?

    • Tito

      Yes, it is fair. You’re only giving one half of the analogy.

      It’s like you and a billionaire go shopping for the same suit. The billionaire buys 1000 of them and gets a huge volume discount.

      Is it fair that the billionaire pays the same per suit when he’s already forking over 100 times more cash than you are?

      Or for a more realistic analogy…

      You walk into Sam’s Club and buy a box of cheerios for less than someone who walks into a regular grocery store. Why? Because the unit-price is lower because Sam’s Club buys in bulk.

      Facebook and twitter send volumes of texts that chacha and 4info would only dream of. At the end of the month, I’m sure they pay more in actual $$ than cha cha and 4info, they just don’t pay as much per message… so, why wouldn’t you give them a discount to keep them happy?

  • Deke218

    Must be nice to be able to throw away 12% of your business. Their business model seems custom made for the lazy. A simple Google search should provide the same answers Cha Cha provides.

  • jdizzle

    i honestly dont care this is my first time hearing about chacha

  • ann

    They make it seem like if they are the only ones being attacked…. anyways just use google send a message to google and it does the same sends you info back… the same tax they have to pay all others have to pay too. They are just the only ones complaining.

  • Sally

    Once again problems with T-Mobile and once more i’d recommend changing your tariff to a better yet adequate one. I use http://simtariff.com/ to search and compare plans from different international providers. If you choose Vodafone for example, there’re some lower costs involved as well