SMS as Business Tool

Mobile communications accounts for 25 percent of revenues from telecommunications services worldwide and Asian subscribers now make up 34 percent of the world total, according to the International Telecommunication Union. Even more interesting to telcos in search of new sources of service revenue, more than 30 billion short messaging system (SMS) messages are sent per year.

With traffic achieving this volume, it is clear that text messaging is no longer a teen cult--the business world is adopting SMS as a medium to deliver a wide range of business-to-business and business-to-consumer information services.

However, delivering these services across national network boundaries is a complex business. An individual company trying to run its own SMS messaging program is faced with the logistical problem of co-ordinating with hundreds of mobile telephone operators across the globe using different networks, technology platforms, pricing strategies, billing systems and languages.

No shortcuts here
From the mobile network operators' points of view there is another major issue: existing international roaming agreements do not allow the receiving network operator to charge for SMS messages. When individual users drive the volume of SMS messages the estimated revenue loss is low. However, the explosive growth of this medium and its rapid uptake for commercial purposes mean that operators are likely to close access to their networks for messaging until cross-networking billing processes are in place or third-party mediators such as MobileWay comes in.

There are technology constraints, too. Network infrastructures may not always be capable of carrying large, commercial volumes of SMS message traffic while maintaining quality of service. Also, with current international roaming agreements there is no guarantee that messages sent across network borders will arrive quickly or even at all.

That's where access aggregators come into the picture. They provide the missing link between content and service providers, corporations and network operators, overcoming differences in technology, quality and pricing. This enables any organization to access its entire wireless customer base via SMS, regardless of the recipients' mobile phone network operator or international location.

Beyond Text Messaging

Access aggregators offer content providers high-speed SMS message delivery, guaranteed message receipt (complete with reporting to the enterprise customer via remote management tools), capacity for high-traffic volumes and support for two-way, interactive services. They also help content providers to provide value-added services to mobile users.

These third parties must operate under a strict no-spamming policy for all mobile services. The content provider brands and owns all content; the aggregator does not promote its own brand to the end user.

However, third-party mediators are providing much more than connectivity between mobile networks. They are also facilitating mobile commerce by allowing the use of the telephone as a payment device--not to store sensitive data, but to transport authentication codes without security exposures for the user or vendor.

Mobile commerce
For example, a user wanting to make an online purchase will provide his handphone number, and then he will receive an SMS with an authentication code that he will use to conduct the transaction. This code is not the credit card number, but a one-time transaction code that authorizes the vendor to complete the transaction and bill the card company or bank.

This application can also be used in conjunction with reverse billing--particularly where micro-payments are involved--so the charge appears on the user's telephone bill. A voucher application could also be deployed allowing the user to buy a movie ticket online, receive a voucher via SMS, and then display the voucher on their mobile phone when they show up at the theatre.

SMS is not just messaging. Any information that can fit into 160 bits can be delivered by SMS--a downloaded ringtone, graphic, voucher, or even a code to configure a WAP phone. Third-party mediators do much more than overcome the technology, language and billing protocol issues that can divide networks, content providers and users. This is a new business model; they are facilitating the distribution of wireless content and the associated distribution of money.

Examples of business-to-consumer SMS services

Mobile information provisioning: Can include general or localized information such as updates on news headlines, weather, events, sports results, stock prices, horoscopes, birthdays, film listings, etc.

Mobile financial services: Any information useful to bank customers can be provided by SMS, including the last five transactions, account balances or overdraft limits. Mobile broking also provides location-independent, real-time information about a share price reaching a particular stop mark.

Mobile security services: A mobile phone with an integrated SIM card and private key signature using SIM tool kit client software becomes a mobile security tool for m-commerce payments.

Mobile loyalty program: All kinds of reminders and updates can be sent to customers, for example confirmation of appointments, overdue video rentals, updates on air miles accumulated, etc.

Mobile ringtone and logo services: SMS can be used to request and receive personalized ringtones or openings screens.

Examples of business-to-business SMS services

Mobile supply chain integration: Integration of the mobile device into the supply chain will make it possible for a sales representative to check whether a particular item is in stock, regardless of his location.

Job dispatch: Mobile devices are becoming an integral part of groupware and workflow applications. For example, mobile data services can be used to assign new jobs to an employee on the move or to provide a service technician with detailed information on a customer's problem.

Corporate employee communications system: SMS can extend the use of corporate e-mail systems beyond an employee's desk and computer.