T-Mobile reduces impact of recent changes

T-Mobile announces today that it has made changes to its campaign provisioning fee structure as well as its refund driven outpayment penalty structure. The changes are implemented retroactively from Feb 1st, 2007 onwards.

1. The one-time campaign provisioning fee is reduced from $1,000 to $500.

2. The new outpayment penalty structure now provides an incentive in addition to penalizing customers for excessive refunds. If the refund ratio is 5% or lower, T-Mobile will increase the outpayment to customers by 2%. However, the penalties for having high refunds have increased. The new structure is detailed below:

T-Mobile Refund Table

Refund Rate	T-Mobile Revenue Share Change (%)
0%-5%	+2%
5%-7.5%	0%
7.6%-10.9%	-4.6%
11%-14.9%	-18.25%
15% or greater	-100%

We applaud the reduction of the campaign provisioning fee. We feel it's important to keep the barriers to entry as low as possible since that will result in more campaigns, more services, and more innovation.

While it's positive that the new refund related structure now has an incentive in addition to a penalty, we still feel that these measures are ill conceived because they penalize all content providers of a certain aggregator in the same way regardless of the specific refund % of any one specific content provider. Secondly, content providers have no direct control over carrier refund policies. We would think that the typical carrier margins of 35-40% on premium SMS outpayments would be sufficient to deal with refund problems. And if not, carriers always have the option to cancel a certain campaign if refunds prove to be too high or costly.