The cost of sending business SMS in the UK has been rising, and Ofcom's market review of wholesale SMS termination rates sheds light on why. Understanding these changes helps businesses make informed decisions about their messaging strategy and SMS pricing.
Why A2P SMS Costs Are Rising
Several factors are driving up the cost of application-to-person (A2P) SMS in the UK:
Mobile Network Termination Rates
When a business sends an SMS, the message travels through an aggregator (like Faretext) to the recipient's mobile network. The mobile network charges a termination fee for delivering the message to the recipient. UK networks have been increasing these fees, particularly for A2P traffic, which they view as a revenue opportunity.
Anti-Fraud Investment
Networks are investing heavily in fraud prevention — blocking spoofed sender IDs, filtering spam, and combating artificially inflated traffic. These security measures are valuable but add cost to the messaging chain.
Direct Route Premium
The gap between direct carrier connections and grey routes has widened. Direct routes (which Faretext uses) guarantee delivery and provide accurate reporting but cost more. Grey routes are cheaper but increasingly unreliable as networks crack down on unauthorised traffic.
What Ofcom's Review Found
Ofcom's market review of mobile termination rates highlighted several key findings:
- A2P termination rates have increased significantly above the regulated person-to-person rates
- Networks differentiate pricing between P2P (consumer) and A2P (business) SMS, charging substantially more for business traffic
- Market concentration — with four major UK networks controlling the market, businesses have limited leverage on termination costs
- Quality variation — not all SMS routes deliver equal reliability, making price comparison complex
What This Means for Your Business
Rising costs don't make SMS less valuable — they make choosing the right provider more important:
Beware of Ultra-Low Pricing
If a provider offers SMS at significantly below market rates, question how. They're likely using grey routes that bypass network agreements. The risks include:
- Messages silently failing to deliver
- Sender IDs being overwritten
- No delivery reports
- Potential network blocking if the route is discovered
Focus on Value, Not Just Price
The true cost of SMS isn't the per-message price — it's the cost per delivered message. A 3p message that reaches the recipient is better value than a 1.5p message that fails 30% of the time. Faretext uses direct carrier connections to all UK networks, ensuring your messages arrive reliably.
Optimise Your Messaging
With costs rising, efficiency matters more than ever:
- Segment your audience: Send targeted messages to relevant groups rather than broadcasting to everyone
- Watch your character count: Messages over 160 characters (or 70 for Unicode) are charged as multiple segments
- Clean your lists: Remove invalid numbers to avoid paying for undeliverable messages
- Use API integration to automate and optimise message sending
Faretext's Approach to Pricing
We believe in transparent, honest pricing. Our UK pricing reflects the real cost of direct carrier delivery — no hidden fees, no grey routes, no surprises. Volume discounts are available for businesses sending at scale. Connect with us to discuss your requirements.
