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A2P SMS: The Types of SMS (Part 2)

September 9th, 2009 · 9 Comments

Continuing with the four types of A2P SMS:

  1. Business – Promotional: These are messages sent by businesses to their customers (current or prospective). In the case of prospective customers, messages are sent to those who are not on the Do Not Call Registry. They are not linked with any transaction, and are typically used to inform them about something. For example, Crosswords sends out updates when it has its periodic Sales, while Fabindia sends out updates on what’s new at its shops. DNA sends out alerts every so often telling us the top stories in the day’s newspaper. One of the issues with promotional messages is that in many cases there is no way to opt-out of receiving these messages. A simple capability to unsubscribe (STOP) will go a long way towards making customers feel in control while receiving these messages.
  1. Business – Spam: These are messages sent by businesses to individuals who are not their customers and who are among the 40 million Indians registered on the Do Not Call Registry. This is Spam, and it is what is causing a lot of grief among people today. [For the record, one can easily register for the DNC by messaging START DND to 1909, or by calling one’s mobile operator. It takes about 45 days to get registered.] Businesses need to exercise restraint and not send messages to those on the DNC Registry, else the backlash against SMS marketing will only increase.

Taken together, these four types of messages aggregate to about 100 million a day or about 3 billion a month, and have created a Rs 250 crore (annual spend) industry, of which about 35-40% flows back to the mobile operators for SMS capacity. On average, bulk SMS capacity comes to about 6-7p, with actual retail prices for specific business customers depending on their actual monthly volume.

Today, this industry is coming under threat because a number of the larger operators want to institute an unreasonable SMS inter-connect (or termination) charge of as high as 15 paise per SMS. Why is this unreasonable? For this, one needs to understand the economics of the SMS business.

Continued tomorrow.

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