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Eliminating Charges for Premium SMS Is 'Good Business'

By Daniel Santa Cruz
November 25, 2013 - News

Responding to customers' concerns about having to pay for spam texts from third parties, AT&T, Sprint and T-Mobile all announced that they will cease charging users for premium SMS messages. This action has prompted praise from some analysts.

"This is a good move by U.S. operators to continue to slash ways in which consumers could be hit with significant bill shock," said Rich Karpinski of Yankee Group, commenting specifically a PC World article.

Verizon, while not part of the announcement, said that it is in the process of winding down premium messages bonuses. In the United States alone, cramming costs users around $2 billion per year – but it also makes money for carriers.

"While knocking $2 billion in charges off the top line could seem like a major hit for U.S. operators, the costs associated with the customer service and revenue assurance processes required to detect and respond to 'cramming' complaints – not to mention the customer ill will – likely offset a large chunk of that 'revenue' anyway," Karpinski continued. "As mobile share of wallet continues to climb, there's enough legitimate opportunity and revenue to be captured as it is. Cleaning up the dark corners of the mobile bill is just good business."

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