Twilio Halves SMS Rates as Apple’s iMessage, Other Rivals Raise The Heat in Group Messaging

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By Kim-Mai Cutler

Twilio, which serves as a backbone for many popular group messaging apps like GroupMe, cut its rate for third-party developers to send SMS to 1 cent per message from 2 cents.

The price cut, which was made several weeks ago and announced today, comes just as Apple announced a free messaging product in the next version of iOS.

The move wasn’t in response to iMessage, but Apple’s product not only has the potential to cannibalize SMS revenues for carriers, it may also threaten the numerous messaging startups that have sprouted up over the last year. The price cut also comes as another competitor Tropo has also cut its SMS rate to 1 cent as well.

While the timing is interesting, it isn’t a first for Twilio, which has been gradually shaving the costs of its service down over the past year. The company originally started charging 3 cents a message, and cut it to two last September. Developers that needed high-volume access to the APIs could, of course, negotiate cheaper bulk deals with the company as well.

“Twilio’s Voice & SMS APIs, as well as phone numbers have all gotten cheaper as we reach new economies of scale and these new prices points make sense for us financially and are a win for our customers,” Morrill tells us.

Twilio offers telephony APIs that make it easier to integrate voice calls or text messages into applications. Many of the most popular group messaging apps like GroupMe and Beluga, which was acquired by Facebook, rely on them to send millions of messages a day. The company has grown to serve about 40,000 developers and raised a $12 million second round last November.

While group messaging was one lucrative avenue for the company, it isn’t the only one. Other startups like Airbnb have used Twilio to reduce the cost of customer service by sending automated text messages to guests and hosts.