Section 5.2. Premium SMS: Getting Paid for Your Service

SMS Fundamentals > Premium SMS: Getting Paid for Your Service

5.2. Premium SMS: Getting Paid for Your Service

Premium SMS, sometimes called reverse billed SMS or MT billed SMS is an SMS that incurs an extra charge on the receiver beyond that normally levied for receiving an SMS. For example, after voting via SMS on the American Idol TV show, voters receive an SMS reply that charges their phone bill. Phone Sherpa (http://www.phonesherpa.com) uses premium SMS instead of MMS to deliver multimedia content by sending a premium SMS that contains a link the user can open with the phone's browser to download ringtones and wallpaper.

From a technical perspective, premium SMS is simply a normal MT (mobile terminated) SMS with a special tariff-level header indicating to the carrier how much to charge the recipient. However, it's not simply a matter of tagging a header onto your messages and waiting for the dollars to start rolling in.

For one, for your tariff-level header to be respected by the receiving carrier, the short code that you send it on must be approved by that carrier for that tariff level. The process is not, unfortunately, simple.

Due to some poorly behaved players early in the history of premium SMS, the carriers now keep a tight rein on who is allowed to send premium SMS messages across their networks. Each application must be individually reviewed and tested by each carrier before that carrier will approve the service, and each carrier's rules and requirements are slightly different. Some carriers will require specific wording in the sign-up messages (e.g., opt-out) while others require the presence of a well-advertised toll-free number on the web site.

Fortunately, the SMS aggregator services not only provide unified access to the carrier's SMS gateways, they will also aggregate the process of applying to the carriers for premium SMS approval. Typically, an application provider will fill out a single, long application provided by the SMS aggregator that contains the rules and requirements of all participating carriers. The aggregator will then farm out the application to the individual carriers and help shepherd the approval process.

However, the approval and testing process can be quite lengthy, upwards of four months, and you should expect to have your application fully functional and testable throughout. Carriers will want to review all the messages your service sends for rules compliance (and they will continue to audit your service on an ongoing basis after approval). Of course, you must pay for your short code and services during this waiting period, whether or not any customers can pay.

Once approval is obtained and your service is underway, the slice of the pie that you, as the application provider, will see can be surprisingly small. Between the carriers and the aggregators, a typical application provider may only end up collecting 40 to 50% of the amount charged to the end users (see Figure 5-2).

Figure 5-2. Premium SMS architecture simplified


And don't count on an immediate cash flow. The period between the time the premium SMS is sent and the consumer charged and when a check arrives from a carrier can be over three months, a potentially damaging wait for a small business.

Finally, high spoilage has been reported by those in the industry. If a consumer complains, or if a message is sent but not logged correctly by the carrier, no money is collected from the end-user and no money is delivered to the application provider.

Don't be too disheartened, though. It's not easy, but it's not impossible. A leading research firm has estimated that almost 1 billion was spent on premium SMS in Europe in 2006.

 

 



How to Build an SMS Service
How to Build an SMS Service
ISBN: 789742233
EAN: N/A
Year: 2007
Pages: 52
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