SMS Interconnect Fees

An interesting offshoot of my investigation in to Fair Mobile statistics was the discovery that some African operators charge an interconnect fee for SMS messages. Now interconnect fees are a topic of hot debate at the moment here in South Africa.  Interconnection Fees are the charges that operators levy to terminate calls from other operators on their network.  Regulators typically intervene on interconnect fees when they appear to be out of step with the actual costs of interconnection.  Of course the “actual” cost of interconnection is a subject of much debate because it represents both a cost and a source of revenue for operators, the details of which are rarely revealed to anyone by the operators.  Thus they are the subject of much speculation.

Less speculative is the cost to the operator of sending an SMS.  I have written previously on the egregiously high cost of sending SMSes in Africa.  However, to add insult to injury, in at least 17 African countries, operators charge an interconnect fee for connecting with other operators nationally.  In many cases they are doubling even tripling the cost of sending an SMS.  The argument for levying an interconnect charge is based on the need of the operator to recover the costs of terminating a call or in this case an SMS on their network.  But let’s face it, the incremental cost of terminating an SMS on an operator’s network is effectively zero or near enough to zero to as to make no difference.  In many countries, including South Africa, there are no internal interconnect fees for text messages.  So here is a list of the most egregious offenders: