What makes WhatsApp’s “bad news” about OTPs in India significant for Amazon, Google, and Microsoft

The Economic Times reports that Meta’s WhatsApp has raised the cost for companies transmitting international one-time passwords (OTPs) in India by a substantial amount and added a new category for them. The purpose of this action is to increase platform income from business messaging services.
Even if the price increase is significant—20 times more than before—it is still much less than what traditional SMS providers charge for sending international texts.

According to the article, WhatsApp is positioning itself to draw in more firms to its expanding corporate messaging market with this approach.
Recently, WhatsApp introduced the “authentication-international” message category, with a cost of Rs 2.3 per message. Beginning on June 1, 2024, this modification will have an effect on enterprises in Indonesia and India.
Effects on Global Enterprises
Experts predict that this decision will have a major impact on global corporations like Microsoft, Google, and Amazon’s communication spending. The article claims that these businesses have been depending on WhatsApp as a less expensive option to the expensive international SMS plans available in India.
Justification for the Modification
Aniketh Jain, the creator of the customer communications firm Fyno, is quoted in the paper explaining WhatsApp’s pricing plan. He claims that because of the substantial cost differential between local and international SMS rates, several large overseas corporations have used WhatsApp as their main verification method.
Telecom firms used to charge local businesses Rs 0.12 for each SMS, whereas international businesses had to pay significantly more, Rs 4.13%, or $0.05, for the same service. Due to this difference in cost, WhatsApp was able to provide all companies with a fixed price of Rs 0.11 per OTP message. Foreign businesses would now have to pay an additional Rs 2.3 per message under the new arrangement.
According to Jain, who was cited in the story, the new price structure is well received. He thinks that by establishing a pricing point that falls between local and international SMS charges, WhatsApp strategically positions itself. Additionally, he draws attention to the fact that these new tariffs begin in India, highlighting the significance of this country for WhatsApp’s business in corporate messaging.
India’s Market for Enterprise Messaging
In India, the business messaging industry is expanding quickly, with a current valuation of more than Rs 7600 crore. This market includes push notifications, Google RCS, WhatsApp Business, SMS, and other communication methods. Even if over-the-top (OTT) channels are becoming more popular, traditional SMS still commands the lion’s share of the industry, with close to 90%. Roughly 80% of all business messaging transmission is used for OTP verification for several reasons, including financial transactions, service delivery, and application logins.
What constitutes an international SMS in the eyes of telecom firms?
Telecom companies like Airtel, Jio, and Vodafone Idea, as well as global internet behemoths like Amazon and Google, have long clashed over the exorbitant cost of international SMS in India. According to The Economic Times, the problem is caused by the vague definition of “international traffic” and the lack of government control over prices in this sector.
While businesses contend that they are Indian-registered firms with locally produced SMS messages travelling over domestic networks, telecom providers categorise international communications depending on the location of data servers. According to industry experts cited in The Economic Times, it is not feasible to correlate SMS rates with server location.
Nonetheless, telecom providers assert that the cost of international communication is high worldwide. They contend that the present price structure is appropriate since India already has among of the lowest calling and message costs in the world.
What is the definition of WhatsApp?
According to a story in the Economic Times, WhatsApp seems to be using a similar approach when categorising overseas businesses for its new pricing structure. The platform supposedly determines if its parent business is headquartered or publicly listed outside of India using a variety of parameters, such as location API and the corporate structure of the organisation.