Ofcom, the UK communications regulator, has shifted its regulation of A2P SMS termination rates from a planned mandatory price cap to accepting voluntary commitments from operators. Faced with competition risks caused by rising wholesale rates, the regulator initially intended to introduce binding price limits. Influenced by the growth of alternative business messaging services and concessions from operators, it abandoned mandatory regulation in favour of voluntary industry commitments while retaining powers for future market intervention.
In January 2025, Ofcom launched a market review of A2P SMS termination services. It found mobile operators held significant market power in this market and proposed a price cap of 1.96 pence per message to control wholesale pricing charged to SMS aggregators. The policy was planned to remain in force until the end of 2028, with a public consultation where numerous industry associations, aggregators and operators submitted feedback.
Subsequently, competition intensified from alternative messaging services such as WhatsApp Business and RCS, and some enterprise senders migrated to other messaging channels. In October 2025, four major operators including BT/EE, Sky, Virgin Media O2 and VodafoneThree submitted voluntary pricing commitments covering over 90% of the UK’s A2P SMS wholesale market. Ofcom formally accepted these commitments on 31 Oct 2025, closed the market review and withdrew the planned mandatory price cap. The commitments remain valid until 31 Dec 2028.
The voluntary commitments stipulate operators may adjust rates at most once every 12 months, with at least 60 days’ prior notice to Ofcom. Public data shows actual termination rates sit between 2.00 and 2.80 pence per message, higher than the previously proposed cap. Ofcom states it will continuously monitor market conditions and may restart regulatory intervention at any time should competition concerns re-emerge.
