Comment by rezonant
2 years ago
> Many SaaS SMS providers are just frontends for legacy telco services.
I worked on an automated SMS marketing system back in the day so I have seen this in action, at scale. This would be stuff like "text LAKERS to 12345 for Lakers updates"- we didn't handle the Lakers but we did handle many sports teams. Though I wasn't privvy to the financial side, I got the sense that the per-text cost ended up being manageable at scale, but this is because we were one organization who would apply the rules onto our own customers, and if we failed to do so properly we risked losing the interconnects to the various carriers. We typically used a single contracted "aggregator" service which provided a unified API for the carriers. When I left, we were using OpenMarket.
When you have a self-service SaaS offering such as Twilio, the per-text costs are going to go up because the barriers for sending unwanted texts (or fail to follow the rest of the rules mandated by the TCPA) is so much lower, and Twilio has to address that organizationally which adds cost.
Additionally, Twilio does not purchase short codes (ie 12345) which means its harder for the carriers to track bad behavior across their network. There is an initial cost (fairly high) to acquiring a short code, though you can also share short codes across customers in some cases. Acquiring a single short code and sending all messages from that short code would likely reduce costs.
I would love to see more detail from Signal about what sort of SMS interconnection they are using, because directly connecting with an aggregator instead of a SaaS offering (if they haven't already) could save a lot of money, and they are definitely at the scale that would allow for it. And given that they only use it for account verification and are a non-profit, it seems likely they could get a good deal since the risk of TCPA violations is effectively zero.
Yeah, aggregator is a very industry specific term, so I just merged into teclo provider. But yeah, all the issues with short codes, national laws, and reputation, makes it very complex. I worked at a company like Twillio that had contracts with different aggregators across the world, and sold a platform to manage SMS interactions. They added a layer to make ensure customers respected opt-out keywords, or opt-in for specific countries, so it would help manage TCPA (and other) violations. I imagine this helped keep costs down. We would definitely fire customers for trying to get around the safeguards.
I was on the support side, so I just saw when it went wrong, which was a lot.
> Additionally, Twilio does not purchase short codes (ie 12345) which means its harder for the carriers to track bad behavior across their network. There is an initial cost (fairly high) to acquiring a short code, though you can also share short codes across customers in some cases. Acquiring a single short code and sending all messages from that short code would likely reduce costs.
Twilio offers short codes, but short codes are country specific, and the costs for sending to the US are low anyway < ~ $0.01/message for most services, lower with volume; IIRC, short code messaging costs were half, but then you've got some overseas destinations where it's $0.10/message and that's real money.