Innovation in 160 characters: How SMS continues to evolve
By Alan Pascoe, Senior Manager of Product Marketing, Tekelec
ABI Research noted in its Q4 2009 “Mobile Messaging Services” executive summary that mobile network operators “are increasingly turning to add new functions and applications to extend SMS [short message service] messaging use and value.” Jonathan Collins, principal analyst, and Dan Shey, practice director of mobile services, also pinpointed the primary growth driver saying, “Person to person messaging will grow at just under 9% over the forecast period [2008 – 2014] but application to person will see 53% growth as businesses increasingly look to mobile messaging to reach out to employees and customers.”
Operators are starting to capitalize on many innovative application-to-person (A2P) growth areas with high-growth markets and subscriber segments still untapped. Significant opportunities remain for revenue generation, subscriber loyalty and synergies with popular social networking and money management platforms.
Mobile advertising and social networking
Juniper Research said in its “Mobile Messaging & IP Evolution: Players, Strategies & Forecasts 2009-2014” report, “The ubiquity of SMS in terms of being supported by almost every mobile phone model creates a large addressable market for SMS-based advertising campaigns.”
Advertisers have two options: a dedicated text message (as Barack Obama announced Joe Biden as his running mate) or in-message SMS advertising, which enables operators to insert sponsored content into the unused portion of text messages. The typical SMS message comprises about 80 characters of the 160-character allotment leaving sufficient space for additional material.
An extension of this is integrating advertising with Twitter and other social networking SMS updates. This allows operators to insert sponsored content to fans of a specific celebrity or brand, allowing them to piggyback on highly-followed Twitter accounts. Because subscribers opt in to receive updates, advertisers and operators have confidence about the audience relevance.
Mobile money
In November 2009, Gartner named money transfers, where mobile subscribers send money to others using SMS, as the top consumer mobile application in 2012. Gartner ranked this above such applications as mobile search, location-based services and mobile browsing. The drivers echo those of other widely adopted SMS services: low cost, fast speed and convenience.
The service benefits both established and emerging markets. In mature markets, mobile money transfers benefit banks by offering new ways to move funds without needing personal assistance. In developing economies, SMS money transfers allow financial services to extend to rural areas with limited or no banking infrastructures. The M-Pesa service in Africa is a prime example. It has 6.5 million users in Kenya who collectively perform 2 million daily transactions with about 30% transacting at least once daily. In Tanzania, the service has more than a million customers transferring $12.8 million per month – up from 280,000 customers transferring $5.5 million per month in May 2009.
Machine-to-machine (M2M)
Many M2M connections rely on GSM/UMTS networks (specifically, GPRS connections) to transmit data between devices and applications. Yet this approach creates “always on” concerns, as many applications only need to use the data channels infrequently.
SMS has several compelling advantages as an alternative: it is always on, offers near real-time delivery and can be dramatically cheaper for M2M devices that infrequently transmit and receive small amounts of data. The cost savings extend to mobile operators, opening the door to new potential revenue streams. The opportunities could be vast, considering that the number of machines in the world is forecasted to be eight times the human population by 2050, according to Detecon, an integrated management and technology consulting company.
Public communication
SMS also offers the best way to reach the most number of people at once with the same information, making it ideal for government-to-public communications, especially in emergency situations. Via text, authorities can send situational updates and emergency contact information – especially valuable when pen and paper may not be available. SMS provides the quickest, most reliable delivery mechanism for this data, ensuring that everyone receives the same content at nearly the same time and doesn’t have to rely on television or radio broadcasts, word of mouth or the Internet. Other government uses for public communication include reminders on voting locations and dates as well as traffic updates.
Conclusion
The pervasiveness, immediacy and relevance of SMS make it an ideal tool not only for personal communication, but also for new application-based services. SMS innovations allow operators to enhance subscribers’ SMS experiences, increase revenue from subscribers and third parties and boost interest, loyalty and usage. These developments, and others in the works, build brand appeal, improve customer satisfaction and reduce subscriber churn.
Comments on Comcast/NBC-Universal
By D.P. Venkatesh, CEO mPortal
The Comcast-NBC Universal merger is in no small part a reaction to the shift in the way the cable and entertainment industries are looking at content distribution. Access to NBC Universal content from a Comcast cable box is just the starting point. We could see Comcast leverage the NBC Universal content for other new Comcast initiatives, such as Fancast, or the soon-to-be-launched TV Anywhere. These initiatives, as well as the NBC Universal’s stakes in Hulu, position Comcast in direct competition with industry-leading new media products. I think we’ll soon see the marriage of a Comcast’s distribution network and NBC’s premium content, such that the best media content and services will be equally accessible from your TV, your pc at home, or on your mobile devices.
