IMessage problems, sending as text?

My setting for imessage is turned on but whenever I send a text to another person with an iphone it shows up with an red exclamation point next to it, meaning it isn't delivered and then it sends as a text again. Then when the person texts me back it says that it is imessage until I reply. What is this? Any suggestions on how to fix it?

Is your data on or Wi-Fi? You're level of service reception might be too low for iMessages.

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