Carrier Fees: What are They & How to Reduce Them?

Carrier fees are extra charges imposed by telecom service providers for using their networks to send SMS, MMS, make calls, or access other communication services. There are additional charges on top of your regular plan cost. These fees cover costs such as network maintenance, regulatory compliance, and emergency services like 911. While some fees are required by the government, many are set by the carrier itself.

Carrier fees are common in the US and Canada and are charged by major carriers such as AT&T, Verizon, and T-Mobile. For businesses that send a high volume of messages, carrier fees can quickly increase monthly costs and lead to unexpected charges.

The carrier fee can vary based on several factors, including the carrier used, usage volume, the destination of the message or calls, and whether the message is sent as SMS or MMS.

Carrier costs can vary depending on the type of communication, such as SMS or MMS. SMS is the least expensive as it only includes plain text up to 160 characters. MMS allows longer messages up to 1,600 characters and can include images, videos, or other media, which increases the fee.

Carrier fees also depend on where your messages or calls are sent. Local communication is usually cheaper as it stays within the same carrier network. In contrast, international messages or calls are much more expensive as they require passing through multiple networks and foreign carriers.

The number of calls or messages sent can quickly increase total carrier fees. The higher the usage, the more network resources your business uses. For example, a business that sends thousands of marketing texts in a month will usually pay much more in carrier fees compared to a company that only sends a small number of messages.

Each telecom company has its own rates, so fees can vary depending on the provider. For example, AT&T, Verizon, and T-Mobile may charge differently for the same service.

Carrier fees typically range from $0 to $0.0060 per SMS, $0 to $0.01 per MMS, and $0.008 to $0.022 per minute for calls. However, the cost can vary widely depending on the type of number you use, such as 10DLC, short code, and toll-free numbers.

Long codes, also called A2P 10-digit long codes in the US, are standard 10-digit phone numbers used by businesses for everyday messaging, such as customer support, appointment reminders, and notifications.

Carrier fees for long code messaging typically range from $0.003 to $0.005 per SMS, $0.0065 to $0.010 per MMS and $0.0085 to $0.014 per minute for voice calls, whether inbound or outbound.

Here’s a quick overview of per-message/per-minute carrier fees for 10DLC messaging/calling, respectively, with some popular US carriers:

Toll-free numbers such as 800, 888, and 877 are commonly used by businesses to allow customers to reach them without paying for the call. They are commonly used for customer support, help desks, marketing campaigns, and service hotlines. Generally, toll-free numbers are designed for free calling, but if texting is enabled, they can also send and receive SMS or MMS messages.

Toll-free SMS and MMS carrier fees generally fall within the same range as long codes, typically $0.003 to $0.004 per SMS, $0.0065 to $0.010 per MMS, and $0.014 to $0.022 per minute for voice calls. These fees apply to both inbound and outbound messages and calls.

Here’s a quick overview of toll-free carrier fees per message (SMS/MMS) or per minute (calls):

Short codes are 5 or 6-digit numbers designed for businesses that send high-volume and time-sensitive messaging such as marketing campaigns, alerts, and one-time passwords (OTPs).

Short code carrier fees typically range from $0.002 to $0.005 per SMS and $0.0065 to $0.010 per MMS. Also, these numbers often come with higher setup and registration costs, making them more expensive.

Here’s a quick overview of short code carrier fees per message:

Carrier fees increase overall communication costs for businesses. It creates billing uncertainty, adds complexity to international operations, and negatively impacts the customer experience.

1. Increases Overall Communication Costs: Carrier fees add extra costs to calls, messages, and notifications. For businesses handling large volumes of SMS or calls, small fees can quickly add up, raising overall operational expenses.
2. Unpredictable and Fluctuating Expenses: As carrier fees can change due to policies, regulations, or message volume, businesses often struggle to predict their costs. This unpredictability creates challenges for budgeting and financial planning.
3. Complexity in International Operations: Operating across different countries involves working with multiple carriers, pricing structures, and regulations. This makes it harder for businesses to manage costs, ensure compliance, and maintain consistent communication worldwide.
4. Impact on Customer Experience: To manage rising communication costs, businesses may limit message frequency, reduce support availability, or restrict certain channels. These cost-cutting measures can lead to lower customer engagement and reduced satisfaction.

You can reduce carrier fees by choosing the right message methods, using VoIP phone systems, limiting call and message volume, favoring SMS over MMS when possible, and sending messages and making calls during off-peak hours.

The two main message formats are SMS and MMS, and each comes with different costs. MMS supports images, videos, and longer content, but it comes with higher charges. So, use MMS only when visuals or advanced engagement are necessary. If you can craft a clear and understandable message with plain text, choose SMS for your business communication. This helps keep your carrier fees low.

Many carriers apply different pricing depending on the network traffic. The price may be higher during business hours, holidays, and major promotions. So, consider making calls and sending messages during off-peak times, such as early mornings, late evenings, or weekends. It not only saves on your carrier fee, but also helps avoid network congestion and improve delivery success.

Sending duplicate alerts, irrelevant promotions, or excessive follow-ups increases carrier fees without adding value. Similarly, unnecessary or lengthy calls also increase costs. Keep your contact list updated, avoid inactive users, and focus on relevant, well-timed messages and calls to reduce overall expenses.

Long messages that exceed standard character limits are automatically split into multiple parts, and each part is billed separately, which increases carrier fees. Replacing long text with short, trackable links helps keep messages within a single segment, reducing costs.

Cloud VoIP solutions help businesses reduce carrier costs with lower per-minute and per-message rates compared to traditional carriers. While VoIP providers charge a subscription fee similar to regular carriers, they eliminate additional charges for international roaming and include call management features like call forwarding, auto-attendants, and analytics.

VoIP services also remove the need for costly on-premise hardware, cutting setup and maintenance expenses, making it a highly cost-effective solution for managing business communications.

Carrier fees are additional charges applied by telecom providers for sending messages, making calls, or using certain phone services. The total cost depends on several factors, including message or call type, volume, and the provider’s pricing model.

These fees can quickly add up, especially for businesses communicating with large audiences or internationally. To reduce carrier fees, businesses can adopt strategies like choosing SMS over MMS, limiting unnecessary call/message volume, and avoiding making calls or sending messages at peak hours.

Another effective option is switching to a VoIP phone system. Platforms like Calilio offer affordable communication rates, with SMS starting at just $0.012 per message and calls at $0.0132 per minute in the US.