Carrying through with its original proposals would have made the UK an outlier in the regulation of A2P SMS termination rates
Operators have made commitments to provide stability in wholesale prices for business messaging
On 31 October 2025, Ofcom announced that it had received commitments from mobile operators in the UK to help stabilise the wholesale prices of application-to-person (A2P) SMS and prevent uncontrolled increases in the future. A2P SMS are automated text messages that businesses and public bodies send to individuals, including for appointment reminders, one-time passcodes and parcel delivery notifications. Organisations typically contract with a messaging service provider, which then uses the services of an aggregator that pays a termination charge to operators for delivery of the text messages. In light of complaints made to it, Ofcom had been concerned about the potential for, and effects of, future increases in the wholesale prices paid by aggregators for A2P SMS. In its Plan of Work for 2024/25, Ofcom stated it would monitor the wholesale SMS termination market and its impact on retail business messaging, and that it would launch a review during the course of the year if it considered there was a need for regulatory intervention.
Ofcom’s proposed cap on A2P SMS termination rates would have made for a unique regulatory environment
In January 2025, Ofcom opened a public consultation on proposals to cap A2P SMS termination rates until the end of 2028. The regulator provisionally found that mobile operators providing this wholesale service each hold significant market power (SMP) and have the ability and incentive to increase their termination prices to an excessively high level in the future. There were 21 responses to the consultation, which expressed mixed views about Ofcom’s proposals. While most aggregators were supportive, BT/EE, Sky, Virgin Media O2 and VodafoneThree all raised concerns, for example with the proposed market definition and price control remedy (which would be based on the historical pricing of A2P SMS termination in 2020). Wholesale SMS termination is generally unregulated or deregulated in Europe – and has never been part of the EC’s list of markets warranting ex-ante regulation. In June 2024, the Australian Competition and Consumer Commission (ACCC) decided not to change the service description of mobile termination to include A2P SMS termination, concluding it was “not satisfied at this point” that regulating the service would promote the long-term interests of end users. Following through on its proposals would have therefore meant Ofcom establishing a unique regulatory landscape in the UK, particularly as its own research has pointed to the increasing popularity of internet-based apps in A2P communications.
The regulator has closed its market review but could always pick it back up if competition concerns later emerge
The voluntary commitments made by BT/EE, Sky, Virgin Media O2 and VodafoneThree will remain in place until the end of 2028, with Ofcom estimating that they will collectively cover more than 90% of A2P SMS sold to aggregators. The regulator has also taken into account market developments since its consultation, which increase uncertainty over future competitive constraints. Developments include price reductions by potential competitor services (e.g. WhatsApp for Business) and signs of growing interest among large senders in other business messaging services. Given the market context, that the commitments cover the vast majority of the market and are likely to promote effective competition and bring greater pricing stability, Ofcom has decided not to continue its market review at this time. While the regulator considers that the commitments should indirectly benefit senders of A2P SMS, such as the NHS, it will proactively monitor compliance with them and on the market in general, and could intervene promptly if the risk of competition concerns increases.
