German mobile operators dump on SMS providers

German mobile operators look likely to put many independent companies out of business by hiking the charges for SMS delivery by over 200 per cent.

The four German mobile operators - D2 Vodafone, D1 Telekom, Viag Interkom and E-Plus - will more than double the prices for sending an SMS to a phone connected to their network. The price hikes will be effective from 1 January.

The cost for providers sending an SMS to the Viag Interkom network will climb from E0.006 (£0.003) to E0.038 (£0.023), according to price lists from bulk SMS provider Brodos.de. Other networks will charge SMS providers between E0.026 (£0.016) and E0.040 (£0.024). These prices do not refer to any costs the consumer will incur.

The move threatens to put many of the independent companies that deliver SMS services out of business.

Jan-Michael Hess, chief executive of Mobile Economy, which is planning to launch an SMS matchmaking service in the new year, said: "We are going to have to pass the cost of this on to the customer.

"That means we will have to make this a premium service, otherwise we won't have any margin. We've had to completely recalculate our business plan. It's making life very difficult for us and very difficult for the users."

A spokesman from T-Mobil in Germany told silicon.de that the reason for the changes is to stop foreign networks taking advantage of low termination charges and bombarding German subscribers with messages. The alternative, he said, is to ban SMS messages from abroad altogether.

It could also be a bid to control SMS spam, which is a much bigger problem in Germany than the UK, says Hess.

The German monopoly commission, the Bundeskartellamt, is looking into the fact that all the networks took the decision together, though no formal procedure has been initiated.

None of the UK networks we spoke to were able to confirm details of a similar move in the UK, but last week Orange clamped down on a small SMS community that was exploiting a loophole in its fee structure for sending SMS.