Telcos Increases SMS Tariff By 25% For Overseas Tech FirmsAs per the report, the firms have urged TRAI to advise telecom operators to levy domestic rates on them as their server is in India and they have an Indian subsidiary, which serves Indian consumers

Telecom operators have increased their SMS Tariff by 25% for overseas tech firms like Amazon, Meta, Google and others for sending messages to their Indian customers. According to an FE report, the latest hike, which takes the tariff to INR 4 per message, comes at a time when these firms have been expressing concern that the telcos overcharge them for sending SMS — OTP, confirmation code, order updates — to their customers in India.

Though these firms have operations in India, telcos charge them international long distance SMS rates because their servers located abroad are used to generate messages to consumers in India. To avoid this, companies like Amazon and Uber have lately reduced their volume of SMS and instead started communicating using their own apps or emails to communicate with their customers, as per the report.

Furthermore, the report stated that Amazon and others have urged TRAI to advise telecom operators to levy domestic rates on them as their server is in India and they have an Indian subsidiary, which serves Indian consumers. But the telecom companies reportedly stated that these companies host their applications outside India which are used to communicate with servers located in India and therefore international rates should be applicable to them.

In January, there were reports that India's telcos are likely to announce a round of tariffs hike for prepaid customers also in mid-2023, given their large 5G investments and higher network costs in addition to equipment and towers, among others. According to media reports, while 5G uptake is expected to improve average revenue per user (ARPU), it will take a few quarters if not more, and in the meantime, tariff hikes are the more viable option.