> Twitter said that's why they got rid of the SMS 2FA. They said it was costing millions to have that enabled for them.

Previous Twitter employees have said that this is incorrect. Because Twitter began as an SMS-only (and then SMS-first) application (remember 40404?), they very early on established direct-connection infrastructure for sending SMS, meaning that they have a marginal cost of literally $0.00/message in most markets. Twitter still has to maintain that infrastructure, because they didn't get rid of SMS 2FA - they just restricted it to Twitter Blue users, so the overhead is still the same.

Almost nobody else who delivers SMS today has that infrastructure, because it doesn't make sense for most services to build.

The only place where Twitter was paying significant amounts for SMS was due to SMS pump schemes, which is a consequence of Twitter gutting its anti-spam detection, resulting in them paying for SMS pumping which was previously blocked.

> they very early on established direct-connection infrastructure for sending SMS, meaning that they have a marginal cost of literally $0.00/message in most markets.

I am very, very interested to understand how that works, because without more detail or sources I'm calling bullshit. I definitely understand how Twitter could have greatly reduced their per-message fee with telecom providers, but at the end of the day Twitter is not a telecom and is still at the mercy of whoever is that "last mile" for actually delivering the SMS to your phone, so I don't understand how they have no marginal cost here. Happy to be proven wrong.

Carriers that run their own messaging infrastructure can allow for direct connections from 3rd parties, and set the price per message to whatever they want, including zero.

For something like Twitter where you could post by SMS, the balance of traffic might have been such that giving Twitter free outbound SMS was balanced by the charges incurred by customers sending to Twitter's shortcode. Or it might just be balanced by increased customer happiness when they can use the product more effectively.

If the carrier doesn't run their own messaging infra, they might be paying their IT provider on a per message basis, and might not be able or willing to set the messaging rate to zero.

For a use case where SMS is used to show control of a phone number, getting a zero cost direct route is a harder sell, but it can happen if the routing through aggregators is poor and the carrier is concerned about that, or if there's some other larger agreement in play.

If you require global connectivity, managing hundreds of carrier APIs, contracts, etc seems like major overhead. Also, there are companies whose only purpose for existing is providing messaging, like Twilio, are they just...not doing this or do the carriers just not play ball? In that case, why would the carriers agree to sell to you at a discount?

Aggregators do some of this, and they can negotiate pricing to some degree, but a carrier is unlikely to intentionally give them zero cost traffic, and even if they do, they're not going to pass that through at zero cost.

I ran the engineering side of carrier integrations at WhatsApp. Carriers wanted to sell data plans with special pricing for data with WA and use WA branding in advertising, because it attracted customers that might later convert to a bigger general purpose data plan. As part of that, we would ask for zero rated SMS to their customers for verification. When it was available, it was generally faster and higher success vs sending messages through an aggregator.

We also had some, usually small, carriers approach us asking us to set up direct routes to them for verification, because their customers would not always receive our messages when we sent through an aggregator. Early in my career at WA, we would just send these carriers to our aggregator contacts, and often things would get linked up and then we'd still pay $/message but it would work better. As we got a little bigger and built support for direct routes anyway, it was usually not too hard to set up a direct connection and then there'd be no cost for that carrier. Messing around with IPSEC VPNs and SMPP isn't fun and the GSMA SOAP messaging APIs are way worse, but once you get the first couple implementations done, it becomes cookie cutter (and FB had built way better tools for this, and a 24/7 support team, so I never had to be up, on the phone with telco peeps at 3 am kicking racoon or whatever ipsec daemon we were running until it finally connected)

Can you say what ordinary (non-discounted) pricing was like, per message? At least in the US, most carriers did I and, believe, still do operate free SMTP -> SMS gateways. They worked okay, although they resulted in oddly formatted messages.

Twilio has a public price sheet[1], I think they haven't actually updated this one lately, but it's a good representation of what ordinary pricing is like. This is not an endorsement (or non-endorsement) of Twilio, but having a public price sheet makes it easy to link to them.

In general, pricing varies widely by destination (country and sometimes carrier), US and some other places are < $0.01, up to $0.10/message isn't uncommon, and some places are $0.20-$0.30/message. Voice calling was usually mor expensive (Twilio should have a price list somewhere for that too; if you can get 6 or 1 second billing, assume a voice verification call is about 30 seconds, but you might have to pay for a whole minute even if you don't use a whole minute).

Those SMTP -> SMS gateways sometimes work in the US, but they don't work much in other countries, and they're not good enough to rely on if your product requires an SMS during the new user flow. SMS costs are real and it's frustrating, but if it costs too much, you need to use something other than phone numbers for ids; I don't think skirting by with email gateways is going to work. But, if you build dynamic routing, I guess you could try.

Also, you've got the use the right email gateway for the user's carrier, and a carrier lookup is on the order of $0.01, unless you have tons of volume, so for the US, you might as well pay for the SMS.

[1] https://assets.cdn.prod.twilio.com/pricing-csv/SMSPricing.cs...

I don’t mean what Twilio charges — I mean what the carriers charge to senders who are directly integrated.

Oh I see... yeah, WA never went direct unless it was zero cost to us, so I don't know what carriers tend to charge. Managing payment to a foreign telecom would be challenging, managing it to enough carriers so the difference in cost is meaningful would be a major endeavor. SMS aggregation is a business with many providers and a low barrier to entry, so while there are margins, I don't think they're very high. There are some telecom groups that run networks in many countries, and some of those offer SMS aggregation services, and the prices were in the same ballpark as pure aggregators, as I recall, but it's been many years since I saw the price sheets.

Thanks very much for sharing your experience and detail! This kind of info is what I was looking for and is super helpful.

Not who you are responding to, but my guess is that it was all fixed costs. They spend $20mm (or whatever) to maintain access, and maintain infrastructure and they get to send as many SMS messages as they want.

So sending 1 costs the same as sending a 10 million. It isn't that they are free to send, its that they are charged for access to the system, but aren't charged per message.

> spend $20mm (or whatever) to maintain access, and maintain infrastructure and they get to send as many SMS messages as they want.

This is not how SMS pricing works in many, if not, most countries.

Is that true at scale? If I tell the telecoms that I want to send a billion messages per year it seems like they might be willing to take a lump sum instead of setting up the systems to bill based on usage.

I have no experience directly with foreign telecoms, so I was simply explaining how something with no marginal cost could still be a very expensive system.

> Is that true at scale? If I tell the telecoms that I want to send a billion messages per year it seems like they might be willing to take a lump sum instead of setting up the systems to bill based on usage.

In most of the world, SMS is billed per-message, so it's basically no extra effort on the Telecoms side at all. In fact, Telecoms' online charging systems are fast enough to calculate users' data usage by seconds in real time, so they don't even blink at counting SMS.

I don't know of countries that mandate a minimum price. If you are doing high volume you are free to work directly with carriers. If you are drawing as much billable traffic as you are sending, then that could even be a wash.

It’s not countries mandating a minimum price (although regulators often impose a maximum), but the carriers themselves.

> If you are drawing as much billable traffic as you are sending

SMS verification traffic is usually unidirectional, so that’s very unlikely to be the case.

Yes but in this case we are describing old-school Twitter, in which people made their tweets via SMS. That's why it was easier for them to make these deals.