Premium-SMS

In the fixed network it is a well established way of making money for content providers (unfortunately lost some reputation due to some black sheep). Now it is also available in mobile networks: short messages which use the 0900 principle. For the customers that means that s/he sends a SMS, typically only one word or number, to a special short code. This short message is charged with (in Germany) Euro 0,19 in many steps up to Euro 2,99 (update years after the report was published: meanwhile 9,99&€ and more are possible). The concrete price depends on operator, country, service and short number. In some countries it is even possible to charge different messages to one short code with different rates. But I would not recommend this because many consumers will only get confused about the price.

Until recently it is a de facto standard that logos and ringtones are ordered via a 0900 voice call number (in Germany: 0190). If one spends too much time, that can become a quite expensive call. Some providers create difficult to understand menus, insert lengthy explanations, repeat everything... the price of the at the end received logo or sound is unpredictable. And if one uses his/her mobile phone, it is even more expensive than a call from a fixed net number.

A Premium-SMS (P-SMS) has a fixed tarif. So the price is totally clear for the consumer. And the advantage in case of content for mobile phones (besides pictures and sounds also games and other Java applications) is that the number of the receiving phone is transmitted automatically and without error. So the requested content arrives always on the correct device.

Jamba! is a very successful example for Premium-SMS. All services can be used by sending just one number to an easy-to-remember Short Code. In the case of the German Jamba! the numbers are, depending on the network, 73333, 75555 or 76666. Other services use unique codes throughout all mobile networks of one country. Yahoo! is another example of a content provider who offers his payment for his services via Premium SMS. More examples are Web-Content-Billing and sending of Multimedia Messages (MMS) triggered by a SMS.

Vodafone D2 lists here all German providers of Premium SMS services including the short codes they use and the prices which the end user pays. Most of these short codes can be used in all German networks, and the prices in the other networks are usually the same or ar least equal.
 

Report "Premium SMS", published in December 2002 by Mobile Streams

In December 2002, a 175 page report on Premium SMS was published by UK based consulting firm Mobile Streams (meanwhile no longer a consulting company but active in mobile content). The authors are the webmaster (Bernd Mielke) and the then acting as Materna Product Manager for Premium-SMS (Rudolf Bäumer).
 

PDF-Datei (121 kB) with Scope of study   Table of figures Table of contents   About the authors

The report on Premium SMS was published with the intention to provide the content provider community, e.g. Premium Rate Service Providers, Web-Portals, Online-Services, Media-Partners, Mobile Content Providers and others with practical information for implementing Premium SMS in the workflow of content billing. In this context many issues have been discussed during practical day-to-day work with Mobile Network Operators, Wireless Application Service Providers and Content Providers. Many questions have been raised by Content Providers which are summarized and answered in this report - overall it is a guideline for Content Providers.

A central part of the report comprises implementation and workflow models for P-SMS services/applications. The second focus of the report provides helpful information about conditions and revenue share models at different mobile network operators and WASP's in Europe and compares the results with other payment models. The examples shown and the market outlook describe the manifold business opportunities to generate sound revenues with the new micropayment tool of Premium SMS.

Before implementing P-SMS in the workflow of content billing, several strategic and technical questions have to be answered.

Following are some questions which are addressed in this report:

• Does P-SMS provide a complementary tool or an alternative to existing billing methods like premium rate call services (0900) or web content billing methods?
• Does P-SMS fit my target group and my business model?
• Which services are suitable for P-SMS?
• Do I want to provide P-SMS for national consumers only or also for consumers in other countries?
• Do I connect via a single aggregator, e.g. a Wireless Application Service Provider (WASP) or do I connect directly to the different MNOs in the country(s)?
• How do I connect to MNOs or WASPs?
• How do I implement P-SMS in the workflow of content delivery?
  • short code ordering. Usage of dedicated short code(s) or shared short code(s)?
  • consideration of different P-SMS billing models in Europe (P-MO or P-MT)?
  • Reference code (keyword) strategies
  • authentication and content delivery process in the case of web content billing
• Which tariff rates are applicable for my content?
• Consideration of regulatory aspects

For further information and in case you are interested to order the report,      please contact the authors by e-mail:      Bernd Mielke and Rudolf Bäumer.

 
More information is available from the mobile network operators (German page). Or, if you do not plan to send thousands of Premium-SMS every day, probably WASPs (Wireless Application Servide Provider) are best suited to be partners for your project. Here some WASPs with a proven track in implementing P-SMS projects:
conVISUAL AG (today: mVISE AG, but no longer active in the PSMS area), DIALOGS Software GmbH, EDIS, IC3S AG, Materna, mBlox, MobileWay, Netsize, Velti. Most of them offer their services in many countries.

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