By far and away, the largest complaint content providers have about Premium SMS / carrier billing is the onerous revenue share terms with wireless carriers. In the U.S, carriers take 30 - 45% of gross revenue which is the average  for most countries. In certain markets like India and Mexico, carriers take 70%+ of gross revenue. These expensive revenue share arrangements have kept many content providers on the sidelines, and as a result have stymied the growth of carrier billing.

But is there hope on the way?

Plenty of evidence points to a future with much higher carrier out-payment rates. For one, U.S and European carriers have already been steadily raising payout  rates through the years.  For example since 2005, Verizon has raised their payouts  from 60 to 70%, AT&T from 6o to 65%, and T-Mobile from 50 to 60%.  European carriers have also been increasing rates, with some paying out as high as 80%. In Scandinavia, a beta test is currently under way which gives credit-card style revenue shares for physical goods mobile payments.

In addition to these carrier trends, a swarm of competing new mobile payments platforms will put significant pressure on the  carriers to improve  revenue share terms at the risk of being left in the dust. It seems like nearly every week a new major mobile payments initiative is being announced which cuts out the carriers.  PayPal is  moving into smartphones recently, Google is sneaking  NFC support into Android OS, and Facebook is fathering an entirely new currency system ("Credits"). There are countless other competing mobile payments platforms emerging from both startups and tech giants alike.

As rational businesses, the carriers have set low payout rates because the market could bear it. For years there has been no good alternative to carrier billing for  "low friction" mobile payments, and the carriers have been well aware of that fact.  But times have changed, and so will the carriers --  payout rates will be rising.