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SMS Gateways, Spam and the Law – Part 1

This topic of legislation regarding sending bulk SMS to will have to be divided into several posts. There are several reasons for this:

  1. The topic itself is large and complex.
  2. The conflicting information available on the subject seems to imply that the laws are not always clear under which conditions sending mass SMS is allowed.
  3. I don’t have much time for research and writing today… :-)

 

Electronic spam is a big problem. Any communication channel that becomes a popular method of exchanging information will eventually be used as a tool to deliver spam. Advertising is the life force of business and what better way to advertise something than to deliver it to the personal communication tool of your potential customer ?

 

So fax spam was big, email spam is huge and SMS spam is and will continue to be no exception to the rule, at least for the next few years.

 

However, legislation and several class actions that have cost companies millions of dollars means that one should be careful not to abuse this mode of communication.

 

The rules of what constitutes a legit SMS campaign fall under different laws in different countries. There are a few countries that have no laws against sending unsolicited SMS, but most countries have laws in place regarding what you can and can’t do when you want to send zillions of texts promoting your latest and greatest product.

Although the laws can differ from country to country, they can usually be placed in two separate categories: Those countries that allow opt-out SMS and those countries that require opt-in SMS.

 

Opt-out SMS means that you don’t have to get the recipient’s consent when sending them the SMS, but with each SMS you have to give the recipient a way to opt-out of future messages from you.

 

Opt-in SMS requires you to get the recipient’s consent prior to sending anything. How to get their consent without contacting them first is your problem – advertise on TV, put an ad on the side of a bus, rent a plane towing a large sign asking them to send an SMS to confirm their interest – whatever.

 

An additional parameter is whether the recipient has previously done business with you or not.

 

Obviously anyone who wants to send bulk SMS campaigns would prefer the opt-out method, but even there the waters are a bit murky and it would definitely help to understand the do’s and don’ts as they pertain to different countries and laws.

 

More on this in the next post…

 

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Using GSM modems to send SMS

There were alternatives to SMS service providers before industrial strength SMS Gateway devices came on the scene.  The alternative was using a GSM modem. This is a modem that you can purchase which accepts a SIM card and has a simple interface (some API and/or access to AT commands). For certain tasks this is good enough, but when you want to run a larger operation, things begin to get messy.

The following video illustrates how moving from a pile of GSM modems to one SMS Gateway made life much easier for a customer:

While we’re on the subject of SMS Gateway videos, here’s another video showing the advantages of Hypermedia’s SMS Gateway:

Tomorrow, I plan to discuss in more detail some SMS applications.

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Private SMS Gateway – additional factors

When considering whether to purchase your own SMS Gateway or whether to seek the services of bulk SMS providers, there are additional parameters that were not discussed in the last post. These are:

  • Redundancy & Reliability
  • Priority
  • Security

Having an in-premises SMS Gateway provides any company that depends on SMS delivery with an advantage in all the the above aspects:

Redundancy & Reliability

Even the best service providers encounter down time (let alone the cheap ones). Even if you have the best IT staff, you’ll encounter Internet connectivity issues from time to time. Combine these two and you get a good chance of not being able to deliver SMS to your target audience once in a while.Is this really critical ? Depends on your operation and the probability of failure. However, having your own SMS gateway either as a backup or as the delivery platform means not having to depend on outside Internet connectivity or the SMS service provider’s up-time to send your messages.

Priority

Using an in-premises SMS Gateway means that the SMS will be sent to the mobile network at the moment it is delivered to one of the SIM cards on the gateway. When using an SMS service provider, you have no control over the priority or path the message traverses until it is sent to the mobile network operator.

Security

Sending an SMS via an SMS service provider, means the message will go through the public Internet and having an unknown set of people who do not belong to the mobile network operator that have access to the contents of the messages you send. Having your own SMS gateway means not having to have another potential weak link in keeping the message private.

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The above factors, as well as those described in the previous post, are considerations I continuously encounter with customers who end up purchasing an SMS gateway.

That’s it for today. I’ll think of something interesting for tomorrows post :-)

 

 

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Rent or Buy ?

The DevelopersHome site has a great article on how to go about deciding on which bulk SMS service to chose in the jungle of SMS gateway providers that offer their services. The article covers 13 good questions you should ask before committing to an SMS broker company. What the article does not discuss (probably since it was posted in 2006, before industry grade CPE SMS Gateways were available for purchase)  is the option of buying your own SMS gateway instead of renting an SMS gateway service from an SMS reseller.

I won’t repeat the contents of the article (just click the above link to read it), but I will update it to to address the same questions with the additional knowledge that purchasing your own SMS Gateway is now an additional option.

So, without further ado, here is a table that compares using an SMS gateway provider (i.e renting) via using your own SMS gateway (i.e buying)

  Question SMS Gateway service (from the article) SMS Gateway device
1 How much does it cost to send 1 SMS message? You need to select between credit based and message based payment. The cost per SMS will be higher as the number of SMS purchased is lower When using a VPN or operator SIM package, cost can be zero or close to zero.
2 Are there any hidden costs? Some companies have hidden setup fees and additional expenses not immediately  evident No hidden costs – but there is the initial expense of purchasing the SMS gateway device. ROI will depend on usage.
3 Are there any minimum purchase requirements or monthly minimum usage requirements? Some require it, others don’t – but in any case, its built into the pricing model so that the SMS service companies don’t lose out on small traffic usage. None
4 Will the purchased credits or SMS messages expire after a certain period? Some SMS service providers have this restriction No
5 How good is the SMS gateway provider’s network coverage? It varies from one SMS provider to another and depends of the agreement the provider has with the network operators in different countries and the quality of service these network operators give to the SMS service provider Since you own the SMS gateway, you decide which network provider will provide the service. The fact that your SMS gateway is connected to the Internet also enables you to place an SMS gateway in the target country and send messages from anywhere.
6 How good is the SMS gateway provider’s network quality? Usually, you just get what you pay for. If you pay a low price per SMS you can be sure that your SMS service provider is paying a much lower price, which usually means it uses less reliable networks. Since you have the ability to choose the network operator, you decide on the network quality
7 Is the protocol / interface you intend to use supported by the SMS gateway? There are various agreed upon ways to send bulk SMS to an SMS gateway service. The most common are HTTP or SMPP. Some SMS gateway services provide some additional protocols. I’ll be referring to Hypermedia’s SMS gateway since I know the specs well:

The SMS Gateway supports SMPP and mail to SMS interfaces, but the real power is in the direct API via TCP which enables any application to use any protocol to send the messages and control the gateway.

8 Is the SMS gateway provider’s API well documented and easy to use? Is there any sample code provided? Depends on the SMS service provider. Yes
9 What payment options does the SMS gateway provider offer? Usually online credit card payment. The same payment method you already use with your mobile network operator
10 Is it easy to manage your account? Can you easily check the number of credits or SMS messages left in your account? The degree of service depends on the SMS gateway provider Checking credits is irrelevant since you own the SMS gateway. Software to manage the gateway is part of the product.
11 Does the SMS gateway provider provide any free SMS messages for testing? Some SMS service providers give this option In the case of Hypermedia’s SMS gateway, you can test the system before purchasing it at no cost.
12 Does your SMS application require 2-way SMS messaging services? Quote from the article:

“All SMS gateway providers provide 1-way SMS messaging services. However, only some of them provide 2-way SMS messaging services. The reason is that it is technically more difficult for an SMS gateway provider to enable its users to receive SMS messages than to send SMS messages.”

2-way SMS messaging is built into Hypermedia’s SMS gateway and this functionality is easily accessed by the SMS gateway’s API
13 How good is the SMS gateway provider’s support service? Quote from the article:

 

“Most SMS gateway providers provide support service by email.”

 

  • “Do they reply?
  • How long does it take for them to reply?
  • Does the reply answer your question well?
  • Are they familiar with the topic?
  • Ask some follow-up questions. Do they have patience? Does the reply answer your question well?”
Again, I can only refer to what I know.

 

Hypermedia is well known for its warm, fast and efficient service. The company places a great deal of value on its customers and offers in addition to standard email, personal service via instant messaging, Skype and direct phone calls.

 

The above table however, doesn’t cover it all – there are some more parameters that should be taken into account before considering whether to go ahead and purchase your own SMS gateway or to register to one of the many SMS gateway service providers. These will be discussed in the next post.

 

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So, How Much for Bulk ?

The effectiveness of using mass SMS sending for various campaigns does not need to be proved. The number of worldwide SMS aggregators speaks for itself. These SMS aggregators (aka SMS Service providers, Bulk SMS providers, Mass SMS providers, SMS Gateway providers, SMS resellers, SMS brokers etc. – I’ll use them interchangeably) are in the business of receiving SMS requests from the Internet and delivering them as SMS to mobile phones of the target audience.

Note that these SMS service providers are not mobile network operators. They are businesses that offer the service of connecting between a customer that wants SMS services (such as making an SMS campaign to their target audience) and the mobile network operator who can actually deliver these SMS to the mobile devices.

The SMS service providers run their business by signing agreements with mobile network operators that can send and receive SMS on their behalf. The number of mobile network operators that they work with depends mostly on the geographical range of service the SMS service providers want to provide their customers with. If financially possible then the more, the merrier since that will enable a global reach for their customers. Since the SMS aggregators order bulk deals from the various network operators they do business with, they can get much lower prices than their customers can, and that’s how their profit is made.

So, let’s say you have a business and you want to make use of this medium called SMS since it has a proven track record in bringing in customers – how do you go about finding the best SMS gateway provider for your business ?

Well, the hidden assumption here is that registering with an SMS gateway provider is the only way to go.

But it isn’t.

In addition to the option of renting SMS gateway services, you have another option – and that is to buy your own SMS gateway. This is a device that is connected to the network in your office (just like your PC) and provides the same simple interface provided by SMS aggregators. However, unlike the SMS aggregators that receive the messages to be sent over the public Internet and forward them to the mobile operator’s SMSC (SMS Center), your CPE (Customer Premises Equipment) SMS gateway directly sends the SMS over the air to the cellular network via the cellular modules located on the device. Thus there are no intermediaries – you send your SMS directly to the customer or potential customer.

So which is it – do you go and rent an SMS service or buy an SMS gateway ?

If I were a salesman at heart, I would now give you all the reasons in the world why it would be much better to get an SMS gateway (considering I work for a company that sells them). But as usual, reality is more complex and, as usual, the correct answer is “it depends”…

Depends on what ? This is a topic for my next post…

 

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The SMS Market – Where Are Things At ?

This blog is the first step in describing the market of short message exchange, currently still dominated by good old telecom SMS.

First off, just for full disclosure, it should be mentioned that am affiliated with Hypermedia Systems Ltd. The company produces, among other products, SMS gateways and applications as a CPE (Customer Premises Equipment) product.

This blog will also be exercise in persistence as I will attempt to add something new and interesting every day – either of things I’ve learned over a long time or things I’ve just discovered via one of the endless Internet communication channels.

So, to start off the first post, just a quick glance at the “state of the union”:

SMS had a great year in 2011. According to Porteo Research, a total revenue of USD 127 billion is expected this year from global SMS traffic, an increase of more than USD 12 billion from revenue generated in 2010.

Even though SMS will still bring substantial revenues after 2011 , the general agreement is that they will slowly decline, totaling revenues of USD 726 billion up to the end of 2015 and an over the years total of USD 1 trillion from now till the end of 2017.

The reason SMS revenues will slowly decline over the next few years (though the sums involved will still be extremely attractive to anyone involved in the texting business) is not because messaging is becoming less popular – if anything, it will become more popular. The reason is that over the years various legacy technologies are moving to the Internet, and SMS won’t be an exception.

The question is, how long will the process take. I think its going to be hard for anyone to give an answer at this point. Looking at past predictions on the adoption rate of VoIP will show that these kind of developments are difficult to predict accurately.

There are many applications today that can be used instead of SMS to send a textual message from one smart-phone to another via the Internet using a specific application. The only problem is that you have to know in advance that the recipient also has that specific application installed on their smart-phone.

If the recipient is a friend of yours, that’s probably not a big hurdle. If the recipient is a business associate or a potential customer – that’s one heck of a problem.

With SMS, you don’t have that problem. Whether the recipient has the latest state-of-the-art Android/iPhone/other based phone or some ancient museum piece cellular phone, you can be sure that if you send them an SMS they will see it.

So when will this same level of ubiquity hit Internet messaging for mobile phones ? That’s anyone’s guess. It requires having a standard that every player is synchronized to and I’m definitely not about to guess when Apple, Google, RIM, Microsoft etc. will all give up their native messaging protocols and play nice with everyone else.

In addition, market research shows that A2P (application to person, i.e texting to or from a large number of customers in various vertical markets, such as financial services, advertising, marketing, business administration, ticketing, voting etc.) will gain more market share in the coming years. Specifically, Juniper Research says that by 2016, A2P messaging will overtake person-to-person messaging and will be worth over USD 70 billion. This will have a big impact on how SMS is used and new applications that will leverage it.

I plan to focus my next post on A2P, the various methods used to reach this market today and how in-house SMS gateways fit into this market.

 

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