The Mobile Entertainment Forum (MEF) Americas wants to do its part to foster a conversation around a possible hike in message termination (MT) fees.
Last week, many players in the SMS industry were enraged by what looked to be a 3-cent MT fee increase that Verizon Wireless would be passing onto its SMS aggregators. This week, content providers and others in the ecosystem are still concerned, but the furor diminished considerably after Verizon Wireless said it was just contemplating a fee hike, not actually implementing it.
MEF’s worldwide membership includes a range of players, including handset manufacturers, carriers, SMS aggregators, content providers and application developers. (Verizon Wireless is not a member of MEF Americas.) Reflecting that diverse membership, the group had a lot of internal debate, both negative and in support of Verizon’s move, according to Jim Beddows III, president of MEF Americas and head of Content & Application Partnerships at Microsoft.
“We don’t want to get involved in a pricing dispute,” he said. But the MEF does want to study what effect an MT fee increase would have on the future growth of the mobile entertainment industry.
Soon after reports of a price hike hit the street last week, MEF Americas board members met via conference call and decided to poll members. The poll included about eight questions, including how respondents’ businesses would be affected by a bump in the MT rates, whether a rate increase would be passed onto their clients and whether it would limit the services they provide.
Fifty percent of the respondents indicated that the proposed fee increase would cause them to limit or curtail their current businesses related to text messaging and 57% indicated that they felt consumer choice would see a significant impact.
Businesses potentially affected include free-to-consumer, ad-supported content; premium content (games, video, ringtones and wallpaper; mobile widgets), alerts, text-based services such as horoscopes; mobile marketing campaigns; SMS voting for TV reality shows; and information services.
One of the issues the group is examining now is how or what fees could be absorbed through the value chain and whether business models will be sustainable, Beddows said.
The MEF and its members want to be part of the dialog with Verizon Wireless, but it’s a conversation that probably will be ongoing for the foreseeable future. “I don’t think it will be resolved quickly,” he said. “It will take time to work through.”