Pakistani banks are now paying telecom operators nearly eight times what they paid four years ago to deliver a single SMS transaction alert. In April, the Senate Standing Committee on Finance and Revenue summoned banking and telecom officials to Islamabad to explain why.
The hearing turned into something bigger than a pricing dispute. It surfaced a three-way argument between banks, telecom operators, and the regulator stuck in the middle, and a detail that may matter more than the headline number: banks say they’re losing money on this too.
The Number Nobody Can Fully Explain
The cost of a single SMS alert has climbed from 42 paisa in 2021 to as much as Rs 3.40 today, an increase of close to 800 percent in four years, according to figures shared with the committee. Telecom operators charge their own retail customers roughly 60 paisa per message, but bill banks several times more for the same delivery, somewhere between Rs 2.6 and Rs 3.4 depending on the carrier and the bank.
“Why are they selling a two-paisa SMS for three hundred paisa?” Senator Abdul Qadir asked during the session, a question that summed up the room’s mood better than any of the data that followed.
The Bill Nobody Wants to Own
Telecom operators and banks spent much of the hearing pointing at each other. The Pakistan Banks Association said the real cost sits with telecom pricing, not bank markups, telling the committee that banks collectively pay operators roughly Rs 25.6 billion a year to deliver these alerts while recovering only about Rs 18.7 billion from customers, a shortfall of nearly Rs 7 billion the banks absorb themselves. Telecom representatives countered that secure message delivery carries real infrastructure cost, and that banks route much of this traffic through bulk aggregators rather than direct carrier connections, adding a markup before it reaches the telecom network at all.
“Banks must not turn basic alert services into optional revenue sources,” Senator Saleem Mandviwalla told the committee, pressing on where the responsibility for the pricing actually sits.
The State Bank’s own position complicates the picture further. Deputy Governor Inayat Hussain confirmed that mandatory transaction alerts are required by regulation to stay free for the customer, and noted that free alternatives already exist, mobile app push notifications among them, that could reduce reliance on SMS altogether. Whether more banks act on that is, for now, a business decision rather than a regulatory one.
At least one has National Bank of Pakistan launched a WhatsApp banking service the same week the committee was still requesting a full cost breakdown, letting customers check balances and pull statements without an SMS in sight. Whether that becomes the norm, or the exception the rest of the sector points to and does nothing about, is the question the Senate committee’s next session probably won’t settle either.
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