I'm working on an application that sends and receives SMS messages to and from its users. (Don't worry - it's not spam - every user of the app expects to send and receive these messages).
One key aspect of the app... If a user sends a message to the app, the app then sends that message out to every person on that user's "team". So, the app will be sending a receiving a pretty significant number of messages (I'm hoping for a few thousand users, and 5,000-10,000 SMS messages per day).
I've been experimenting with a number of options:
Option 1 is great, since it's free, but it's unreliable (apparently mobile providers queue these messages after SMS messages they can charge for, so they're frequently received late or lost)
Option 2 is also cheap, but the mobile phone can't keep up with the number of messages I'll be sending. Also, the mobile phone provider will consider this volume of messages excessive.
Option 3 is perfect, except that SMS gateway providers charge PER MESSAGE (usually $0.02-$0.06 per), which creates an impossible scaling problem. (Reminds me of the old business adage... "Sure we're losing money on every transaction, but we'll make it up in volume...")
So, long story short - how on EARTH did Twitter pull this off? They've been doing a similar thing (allowing users to exchange SMS messages with the app) since the beginning. Even if they negotiated an INCREDIBLE discount (say, $0.001 per message), they'd be paying an ENORMOUS cost to send the hundreds of millions of messages they handle.
Does anyone have any idea how they did this?
After a bit of Googling, it looks like Twitter has simply been signing deals with cell phone companies in various countries. For example (Twitter blog post link spam incoming):
Some more details about SMS in general here.