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How to Choose an SMS Service Provider (SMS Gateway Provider, SMS Reseller, SMS Broker)?


Introduction


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This article discusses 13 questions that you should ask yourself when choosing an SMS service provider. An SMS service provider is a business entity that provides SMS messaging services but is not a mobile network operator. It acts as a middleman between mobile network operators and SMS service users. An SMS service provider signs agreements with a lot of mobile network operators to obtain their permission to exchange SMS messages with their mobile networks, and offers an interface for users to send and receive SMS messages. Some of the interfaces are very simple to use since they hide most of the technical details of SMS messaging. Some others are more powerful that support more features. SMS service providers are also known as SMS gateway providers, SMS resellers or SMS brokers. This is because:

  • SMS gateway provider. An SMS service provider provides an SMS gateway for its users to send SMS messages to. This SMS gateway will then route the SMS messages to another SMS gateway or SMSC.

  • SMS reseller / SMS broker. SMS service providers buy a large amount of SMS messages from a lot of wireless carriers at a low price per SMS message. They then sell the SMS messages at a price higher than the cost.

More information about SMS service providers can be found in the "SMS Service Providers (SMS Gateway Providers, SMS Resellers, SMS Brokers)" section of our SMS tutorial. Links to the web site of some SMS service providers and a comparison between their SMS messaging services are available in "Comparison Table of SMS Service Providers (SMS Gateway Providers, SMS Resellers, SMS Brokers)".


1. How much does it cost to send 1 SMS message?

Cost of service is an important factor that you need to consider when choosing an SMS gateway provider for your SMS application. Typically, SMS gateway providers can be divided into 2 categories in terms of how they require you to pay for their SMS service:

  • Credit-based
    You purchase a number of credits from the SMS gateway provider. Sending one SMS message will cost you one or more credits, depending on the country you send the SMS message to. For example, sending an SMS text message to India might cost you one credit while sending an SMS text message to the United States might cost you two credits.

  • SMS-based
    You purchase a number of SMS messages from the SMS gateway provider. The cost for sending one SMS message is the same for all destinations. For example, if you purchase ten SMS messages, you can send at most ten SMS messages no matter the destination is India or the United States.

In general:

  Cost per credit (credit-based payment) < Cost per SMS message (SMS-based payment)

So, is credit-based payment always better? Not definitely. Let's take a look at the following example:


SMS gateway provider A (Credit-based payment): Cost per credit = US $0.06

SMS gateway provider B (SMS-based payment): Cost per SMS message = US $0.1

 

SMS gateway provider A

SMS gateway provider B

To country X

(Suppose 1 credit is required.)

Cost per SMS message = $0.06

Cost per SMS message = $0.1

To country Y

(Suppose 3 credits are required.)

Cost per SMS message = $0.06 * 3 = $0.18

Cost per SMS message = $0.1


From the above table, you can see that if your SMS messaging application targets on country X, you should choose SMS gateway provider A since sending an SMS message to country X with SMS gateway provider A is cheaper. Similarly, if your SMS messaging application targets on country Y, you should choose SMS gateway provider B. If your SMS messaging application targets both countries, then of course you should route all SMS messages destined for country X to SMS gateway provider A, and those destined for country Y to SMS gateway provider B.

For most of the SMS gateway providers, the cost for sending one SMS message decreases with your purchasing amount. For example, the pricing structure of SMS gateway provider B and SMS gateway provider C might be like this:


Number of SMS messages purchased

SMS gateway provider B

SMS gateway provider C

1 to 10,000

Cost per SMS message = $0.1

Cost per SMS message = $0.09

10,001 to 20,000

Cost per SMS message = $0.08

Cost per SMS message = $0.08

>=20,001

Cost per SMS message = $0.06

Cost per SMS message = $0.07


For the above table, you can see that if you plan to purchase 1 to 10,000 SMS messages at a time, you should choose SMS gateway provider C since its cost per SMS message is lower. But if you plan to purchase more than or equal to 20,001 SMS messages at a time, you should choose SMS gateway provider B.


2. Are there any hidden costs?

A few SMS gateway providers do not write clearly all the fees involved in the pricing page of their web site. They hide some of the fees so that their SMS messaging service looks cheaper. When you go checkout, you may find that some additional fees are required. For example, setup fees.


3. Are there any minimum purchase requirements or monthly minimum usage requirements?

Some SMS gateway providers have a minimum purchase requirement. For example, an SMS gateway provider might require you to buy 1,000 credits or more each time. If you are not sure whether your SMS application will be a success, an SMS gateway provider with no minimum purchase requirement will be your choice. You can start by purchasing a small amount of SMS messages or credits. Later as your SMS application gets more users, you can purchase more.

Usually SMS gateway providers do not have any monthly minimum usage requirements. Monthly minimum usage requirement is more common in SMS messaging services provided by mobile network operators. For example, a mobile network operator might only provide SMS messaging services to customers that have a monthly traffic of, say at least 50,000 SMS messages.

If your SMS application has a very small amount of SMS traffic, an SMS gateway provider with no monthly minimum usage requirement will be your choice. For example, if your SMS application is a remote monitoring system that sends an SMS alert to the system administrator whenever it finds any server is not responding, you should choose an SMS gateway provider that does not have any monthly minimum usage requirements. This is because the servers being monitored should be running properly most of the time and the remote monitoring system seldom sends an SMS message.

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