Brits Love Texting! Sending 1 Billion SMS per Week

The Mobile Data Association (MDA), in their latest reported figures, show that the British are sending more than one billion text messages every week.

These figures reveal an unexpected, but significant 25 percent rise in SMS usage among the British population, shattering all previous forecasts.

Predictions for total British SMS in 2007 now are now estimated around 52 billion, far more than the 42-48 billion previously predicted.

In September 2007 reports show 4,000 text messages were sent every second.

According to Mike Short, head of the MDA, there are a number of reasons for the rising popularity of SMS in Britain:

1. It’s convenient, comprehensive, cost effective, and it’s on every handset and network.

2. The assurance of successful delivery was perfect for many messages that may not merit an entire conversation or that people did not want to trust to voicemail.

3. Many people were also happy to get news and updates about topics or teams they follow via text messaging.

One of the primary reasons for SMS growth in the UK is the increased use of text messaging by businesses.

4. It’s much more convenient for businesses to notify many employees with an urgent message using a text message.

5. Managing customer relationships is more efficient with SMS when communicating deliveries, appointments or house calls.

The United Kingdom is among the top six countries sending text messages, and there are no signs that this growth trend in the UK will end any time soon.

US Mobile Subscribers Now Over 243 million, Sending 1 billion SMS per Day

As the opening keynote speaker at the CTIA Wireless IT and Entertainment show, Steve Largent, CTIA President, reported from his recently released semi-annual report on the US mobile market, that there are now 243.4 million mobile subscribers in the US, which represents 81% of the population.

Texting continues to rise. Users sent 28.8 billion SMS in June, and are now sending more than 1 billion text messages per day.

Also, revenues from wireless data service for first half of 2007 rose to $10.5 billion, a 63 percent increase over the first half of 2006. Consumers are spending more on non-voice services, as wireless data revenues now amount to 15.5 percent of all wireless service revenues.

You can view selected stats from the report here.

Opinion: Wireless Carriers and Innovation

Here is a great article to read by the Wall Street Journal's Walter Mossberg before you head out to the the CTIA conference in San Francisco tomorrow. Carry his thoughts with you while your attend the many presentations. Viva la revolution!

$10,000 U.S. Cellular Penalties

U.S. Cellular Corporation is revising its penalties in case of failure by a content provider to adhere to the carrier's rules and regulations, in following 2 areas:

1. A content provider is prohibited from including or transmitting any Binary Content as part of a message unless expressly permitted by the carrier in writing. For each such breach, the content provider is liable for liquidated damages of $10,000. Binary Content is defined as anything that is not 7bit ASCII text. This includes 8bit text, 16bit text, Wap Push messages, MMS messages, SMS Wakeups, vCard, vCal, etc.

   
   

2. A content provider needs to adhere to the Mobile Marketing Association's 'Consumer Best Practices Guidelines for Cross-Carrier Mobile Content Services'. For each material breach of such guidelines, the content provider will be liable for liquidated damages of $10,000.

AT&T Disconnecting non-SRM compliant premium subscription services

AT&T has alerted us that they will start disconnecting all short codes that run premium subscription campaigns and are not using AT&T's Subscription and Refund Management (SRM) Platform. AT&T will typically not give any warning before disconnecting a particular code.

Alltel price cap and subscription periods

Effective immediately, Alltel is reducing the maximum per message premium price to $9.99. Higher per message prices can be approved on a case-by-case basis but content providers will need to demonstrate the value of the content they'll provide. Also, going forward, Alltel will limit subscription periods to monthly only. Daily and weekly subscriptions are no longer allowed. Existing campaigns will be grandfathered in and won't need to change, but all new campaigns need to adhere to these new policies.

AT&T Zero Rate Policy Change (UPDATED)

AT&T requires the use of 'zero rated' messages (ie. messages that are free to the end user) for all responses to HELP and STOP requests. These responses arrive on the consumer's cell phone via an 11-digit short code provided by AT&T.

AT&T is making two changes to aforementioned policy:

1. The 11-digit short code is replaced by a 4 digit short code. The short code number is 1006.
   
2. Not only responses to HELP and STOP requests need to be zero-rated, but also subscription confirmation and subscription reminder messages.
   

In addition to these changes, AT&T requires that all subscription confirmation messages contain a toll-free technical support number, website address, or AT&T customer support number. Refunds and cancellations should ONLY be processed using AT&T's SRM system.

ReminderConnection customers need to ensure that all subscription confirmation and reminder messages are sent with 'price=-1', which will automatically trigger the zero-rate tariff and 4 digit short code on AT&T's network.

UPDATE (10/1/2007): We were informed today to hold off on the implementation of this new policy. Because of consumer litigation, AT&T felt it was necessary to change the policy, and that hasn't changed. So we do expect this new policy to be implemented some time in the future. Stay tuned for more info.

AT&T Delays implementation of OPPC

As previously reported here, AT&T is preparing to roll-out phase 2 of their subscription management system. It's called OPPC which stands for Off-Portal Purchasing Control. The basic idea is that AT&T will take over the responsibility for handling the double opt-in consumer registration process.

AT&T has just announced that it would delay the roll-out of OPPC until Q1 2008. This will give content providers extra time to test their implementation and integration with the OPPC system during Q4 2007. AT&T stresses that the delay does not signal a reduced commitment to switch over to the OPPC system. On the contrary, AT&T intends to invest even more time and effort in making sure that the OPPC platform is successfully rolled out.

Opinion: Verizon and Naral

As originally reported by the New York Times and discussed by the San Jose Mercury News, Verizon first rejected and then later - after public outrage - reversed course and approved an SMS campaign created by abortion rights group Naral. See this interesting article by Timothy Karr for a round-up of opinions and reactions.

Despite what was reported by many news outlets and blogs, this is not an isolated incident, and it is most definitely not limited to Verizon Wireless who was unfortunate enough to get caught in the middle of the controversy.

As readers of this blog know, carriers grant short codes - short 5/6-digit phone numbers used to communicate with mobile users - completely at will. Without a short code a content provider has no way to establish a text messaging based interactive conversation with a consumer. Therefore, each content provider who wishes to create a mobile campaign is forced to go through a laborious approval process with each one of the top carriers without guarantee that all or any of them will approve the campaign. This process can take up to 6 weeks and is quite costly because monthly short code rental fees of up to $1,000 per month are required even though there is no guarantee that the short code will ever be used.

It's as if a website had to pay $1,000 per month to register a domain name, and then were forced to go obtain approval from every single ISP in the country before that domain name were made available to the ISP's customers. Imagine what that would do to innovation on the Internet.

Even worse than that, every wireless carrier has its own 'playbook' of rules and regulations that content providers need to adhere to in order to get their campaign approved. Needless to say, playbooks vary by carrier, and content providers are often forced to implement sophisticated business logic within their applications to deal with carrier idiosyncrasies. And playbooks are not static. They change. And they change frequently, resulting in content providers having to make constant changes to their application in order to keep up with carrier mandated changes.

We believe that this approach is fundamentally wrong for multiple reasons:

1. Wireless carriers should not be in the business of deciding what type of content their customers have access to. They're not monitoring mobile phone calls to screen out offensive content, or limiting calls to certain 'approved' phone numbers. They should not be limiting valid SMS conversations either. At the same time, they should also not be legally responsible for any content that flows through their network.

2. Carrier specific playbooks should be replaced by 'best practices' rules that govern all SMS based communication. The MMA is already publishing a best practices guide that is used by the carriers as a basis for approval. The problem is that many of them 'complement' the MMA guide with their own 40-60 page playbook.

3. At the same time, we feel that carriers ought to be free to design their own guidelines as it pertains to premium SMS billing. It is only fair that they can decide under which conditions they will allow content providers to bill consumers on the cell phone bill. It would be nice, though, if the revenue share percentages were increased to levels seen in Europe and Asia.

Many players in the mobile ecosystem are complaining bitterly about the difficulty and cost of launching off-deck mobile services. Many mobile campaigns fail. And failure is costly. We feel that it would be in everyone's interest - also the carrier's interest - to stimulate innovation by significantly lowering the barriers to entry, and we suggest 4 concrete steps to achieve this:

1. Short Codes for non-premium SMS campaigns are AUTOMATICALLY approved by all carriers upon granting of the number, and provisioned within 7 days. No carrier-specific campaign forms or approvals are required.

2. The MMA guidelines are the sole and only guidelines that content providers need to adhere to for all non-premium campaigns.

3. To further reduce the cost of short codes, codes can be shared amongst various content providers based on keyword.

4. Carriers can continue to keep full control over all short code approvals that involve premium billing.

We feel that this would be a huge step forward for the industry. It would foster innovation by decreasing the barriers to entry and allow for critical experimentation to find out what works best. It would be our best chance for finally realizing the full potential of text messaging as a way for brands to enter into a meaningful direct conversation with consumers.

Premium Billing on US Cellular

We're happy to announce the availability of Premium Billing on US Cellular. Only text-based single purchase programs (no binary, no subscriptions) are currently supported with price points ranging from $0.50 up to $30. US Cellular consumers have a global spending limit of $50 per account per calendar month, enforced by US Cellular.

All campaigns need to comply with MMA Guidelines an the USCC Rule Book (more details to follow).

US Cellular has over 6 million subscribers in 189 markets in 26 states (see coverage map - areas in blue). The company has converted its network to CDMA-1X digital technology, adding more voice capacity, high-speed data products and features, and expanded coverage areas. A small percentage of the U.S. Cellular subscriber base is pre-paid customers not eligible for premium traffic at this time which will be available in the future.

T-Mobile Playbook Changes

T-Mobile released a new version of its short code playbook, detailing all requirements content providers need to adhere to when running mobile campaigns on T-Mobile's network. As usual, T-Mobile does not allow 'grandfathering-in' of existing campaigns, meaning that all current campaigns need to be in compliance with the new guidelines within 30 days from today.

The playbook has grown to a massive 45 pages and is to be used in conjunction with the MMA Best Practices guidelines which are also mandatory.

The key changes in the current version (version 6) of the playbook are:

• Sweepstake campaigns are approved on a case-by-case basis and if charged at a premium rate, need to include a piece of downloadable content for the premium charge.
  
• Premium Interactive TV campaigns are approved on a case-by-case basis and may require on-air visual and verbal call out of pricing and Ts&Cs. Only one-time events are allowed, no subscription billing.
  
• Opt-in and opt-out via a mobile internet browser (WAP page) is now allowed.
  
• WAP Billing is now offered as an alternative to PSMS billing.
  
• Promotional or complimentary downloadable content is now allowed on a case-by-case basis if the download is tied to a specific promotional campaign for a 'non-mobile' product or service.
  
• The restrictions on downloadable applications are relaxed. Both non-networked and networked applications and games may be permitted as long as they have been certified by True North Services (TNS), T-Mobile's third party application certifier. However, applications and networked games, if approved, are only available to T-Mobile subscribers with unlimited Internet access.

Verizon Wireless Monthly Spending Cap

Verizon Wireless imposes a monthly spending cap of $100. Please note that this spending cap is to be applied on a calendar-month basis. This means that if someone signs up for a mobile chat campaign on September 28th, he can spend up to $100 between September 28th and September 30th, and another $100 from October 1st to October 31st.

Verizon Phone Blocking

Verizon now allows subscribers to block the delivery of Premium Billed SMS messages. When a content provider attempts to send a PSMS message to a blocked phone, Verizon will return a specific error code, and the content provider needs to send a zero rated message to the subscriber to inform him of the blocking.

Verizon will also block the delivery of MMS messages to subscribers of Verizon resellers such as Tracfone, Airvoice, Page Plus, or West End, etc. A specific error message will be returned.

If the content provider observes this error during the delivery of a message that is part of a subscription, the content provider needs to cancel the subscription, and confirm to the subscriber that his subscription has been canceled.

Monthly subscription reminder messages

The Consumer Best Practices Guidelines, issued by the Mobile Marketing Association (MMA), specify that all subscription campaigns require a monthly reminder message. Before a program is renewed, a renewal message needs to be sent to the subscriber reminding him/her that the subscription is about to be renewed. The reminder message needs to specify the pricing as well as opt-out instructions. The guidelines are silent on how much lead time a content provider needs to give the consumer before actually renewing the subscription.

All US carriers require content providers to implement the MMA guidelines, but some carriers impose additional restrictions.

Verizon Wireless announces that consumers should be given at least a 2 business day lead time before a subscription gets renewed. This means that the monthly notification message needs to be sent out 2 business days before the renewal Premium SMS message is initiated.

Many content providers have been sending out renewal messages 10 or 20 minutes before sending out the premium sms message. This is no longer allowed by Verizon.

T-Mobile and sweepstakes

Not surprisingly, T-Mobile is now requiring that any end-user who is participating in a premium sweepstakes campaign is getting some mobile content delivered to the phone in return for the premium charge. Technically, the user is paying for the mobile content, and is getting the sweepstakes entry for free

As mentioned here, Verizon Wireless has a very similar requirement and I expect that other carriers will follow pretty soon.

I suspect that these changes are the direct result of the class action lawsuit initiated by a viewer in Georgia who participated in the 'get rich with Trump' mobile sweepstakes campaign while watching The Apprentice on NBC. See here and here for more details about the lawsuit.

Americans 4 years behind the UK in SMS adoption

While SMS adoption has been increasing rapidly in the US, it is clear that the overall development of the market is still in its infancy compared to Europe. The IntoMobile blog has some interesting statistics about adoption differences. For more details, check out Tomi T Ahonen's article.Verizon Wireless has just reached the '1 SMS sent per day per user' mark, which happened in the UK 4 years ago. Today, we're at 6 SMS per day per user in the UK, 5 in Ireland, 10 in South Korea, and 15 in the Philippines!

New AT&T Branding Guidelines

With immediate effect, AT&T no longer allows the use of its logos and trademarks by off-portal content providers and aggregators. This means that all official branding logos and AT&T registered trademarks MUST BE REMOVED IMMEDIATELY from all consumer facing materials, such as websites, brochures, advertising, etc.

In promoting products and services, content providers should make it clear that they are the sole provider of services. Promotional material should not imply that AT&T provides the service, but only that your service can be purchased by AT&T subscribers.

Any reference to AT&T needs to be made using plain text.

AT&T's auditing partner, Accenture, will start auditing 3rd party websites and advertising for infringement of the above rules within 2 weeks.

Please make sure to remove all infringing AT&T references from your promotional materials asap to avoid possible cancellation of your short codes.

Happy Birthday SMS and SMSC

Today, the mobile phone industry celebrates the 15th birthday of the Short Message Service Centre (SMSC). The SMSC, first brought to market by Acision in 1992, is the principal application behind text messaging. Before 1992, the first ever SMSC was introduced as a product designed primarily for operator use to send trouble alerts and improve reliability of a developing mobile industry.

The SMSC has evolved considerable over the last 15 years, in robustness and scalability. According to Steven van Zanen, VP Marketing for Intuitive Messaging at Acision, "the phenomenal evolution of the SMSC over the past 15 years has been a direct factor to the overall success of SMS.

Despite the rapid evolution of the mobile market, SMS is still the most important value-added service for operators. For operators looking to provide subscribers with robust messaging services, the SMSC platforms available today provide mix and match solutions, which means operators can specify numerous SMS capacities to meet their unique requirements. It is this scalability that makes the SMSC cost effective and adaptable to both growing and mature markets. Even in the most developed markets, such as Western Europe where SMS service penetration has reached 90%, SMSCs are vital to operators seeking to differentiate themselves through high-quality enhanced messaging services.

Verizon limits Premium SMS tariff to $9.99

Verizon Wireless announces an important change to their handling of new premium SMS campaigns. Effective immediately, the maximum price point available for new premium short code based campaigns will be $9.99.

This change only applies to new campaigns that are submitted to Verizon for approval. Campaigns that are currently running on price points higher than $9.99 can continue to do so.

New MMA documents

The MMA has released a new version of its Consumer Best Practices Guidelines, which can be downloaded here. The key changes are:

• Use of 'Free' has been relaxed. It used to be the case that the word FREE could not be associated in any way with a premium billed campaign (e.g. 'sign up now and receive the first 5 alerts FREE'). This is now possible, with certain restrictions.


• Marketing to children (anyone under the age of 13). The MMA requires content providers to adhere to COPPA, and also imposes additional restrictions in how mobile campaigns are being promoted.


• Restrictions on use of single opt-in for Participation TV programs has been made more specific. Restrictions include maximum price ($1.49), transaction-only billing, and use of both verbal and visual pricing instructions during the call-to-action.


• The Best Practices document now also includes guidelines for WAP services and IVR based opt-in mechanisms.


• Further restrictions on running chat programs.

The MMA has also released two interesting documents providing some background information about running off-deck services and creating successful mobile marketing campaigns.

• 'Off Portal - An introduction to the Market Opportunity' introduces the reader to the world of direct-to-consumer mobile services, the market opportunity, and the best practices on how to create an off-portal service.


• 'Understanding Mobile Marketing - Technology and Reach' describes the opportunity of using short codes and mobile technology to create interactive marketing campaigns.

While these documents are certainly useful, it is good to keep in mind that these are 'sales documents', mainly written to promote the use of mobile services, hence not necessarily very objective, and most definitely overly optimistic in describing the overall market potential. One example: the mobile marketing case studies tend to be very long on descriptions, but very short on actual results. Hmmm.... now, why would that be ?

Change in Verizon Binary Message Flow

(Updated: July 18, 2007)

Verizon is implementing a new billing mechanism to improve success billing ratios (SBR) for Surepay customers. Surepay is Verizon's prepaid brand.

The change involves 2 elements:

1. Change in message flow. Premium billing of the subscriber should no longer happen on the WAP Push message, but through a separate 'thank you' SMS message, as is the case with the other carriers. The 'thank you' message should only be sent after the WAP Push message was successfully delivered. the customer has received a handset delivery receipt, indicating that the content was successfully delivered to the subscriber.

2. Change in billing API.

ReminderConnection customers need not worry about the change in the billing API. This change will be handled by ReminderConnection without any customer impact. However, ReminderConnection customers will need to make the proper message flow changes. The deadline for implementing these changes is August 10, 2007. Certification requests entered after July 16, 2007 will also need to adhere to the new message flow. Please contact your account representative in case of questions.

Sprint Payment Re-Capture

Carriers have the right to deduct any non-collectible premium SMS revenue from the outpayment made to content providers. If the outpayment was already made, they have the right to reduce future outpayments to account for past uncollectible amounts. We haven't seen this happen ... until now.

Sprint has informed us of their plans to 're-capture' payments made to content providers for uncollectible revenue as well as refunds, and do so retro-actively starting January 2007. Details on the possible negative impact for content providers are not known at this time, and as soon as we receive further information, we will immediately inform the impacted content providers.

Sprint Refunds and Message Flow Changes

Starting with the June billing period, Sprint will start deducting refunds from the outpayments made to content providers. Previously, Sprint was not accounting for refunds. Sprint has also implemented a new message flow whereby subscribers are 'validated' before the premium content is delivered and billed. This means that subscribers who cannot be billed will no longer be able to receive premium messages or make phone calls. These subscribers are 'hotlined' which means that when they attempt to make a phone call, they will be redirected to Sprint's customer service hotline. ReminderConnection will start returning a specific error code for hotlined subscribers.

Summary Table of Carrier Requirements/Restrictions

It's often hard to keep track of what is allowed and what isn't. Because of that, we've created a table summarizing all carrier requirements and restrictions related to operating common short code (CSC) campaigns, both premium and standard rated, in the US.

You can download the table here. Let me know what you think. Drop me an email: travis[at]reminderconnection.com

Global Messaging 2007

The fourth annual Global Messaging conference took place this year in Monte Carlo. Analysts are predicting a continuing growth in the volume of SMS messages sent worldwide. In 2005, yearly SMS traffic reached the 1 trillion level. For 2010, estimates vary between 2.3 trillion and 3.2 trillion.

According to John Delaney, principal analyst in Ovum's Consumer Group, there are five reasons for the success of SMS:

1. Simplicity: everyone can use it.
   
2. Ubiquity: everyone has it.
   
3. Awareness: everyone knows about it.
   
4. Critical Mass: everyone can receive SMS and knows how to read it.
   
5. Reliability: SMS messages don't get lost all that often.

According to Cellular News "A key industry trend reiterated at Global Messaging 2007 was that in the mature markets, mobile networks are starting to acknowledge the important role of wireless applications service providers (WASPs) and aggregators in growing the A2P market. In the experience of mobile operators, the higher percentage paid out to WASPs, the more revenue the mobile operator makes from messaging. Mobile operators in the United Kingdom currently offer the highest payouts in the global messaging market."

Let's hope U.S. carriers get the 'message'.

Verizon Content Rating

Verizon is in the early stages of releasing a new content rating system for off-portal content. All short code programs will need to be categorized in one of four different content categories. All Verizon subscribers will also be categorized in one of four content categories. If a content provider is attempting to deliver content to a subscriber in a 'lower' category, the content download will fail and a specific error will be returned to the content provider, who will need to send a message to the subscriber alerting him/her that the content is not available.

The four content categories are :

Verizon content/subscriber categories

Category	Recommended Age Group
C7+	Age 7+
T13+	Age 13+
YA17+	Age 17+
Filter Off	Age 18+

The subscriber classification can be changed by parents by logging in to their Verizon account. The default subscriber classification is T13+. The content classification is set by the content provider and actively audited by Verizon to prevent abuse. The default content classification is T13+.

Timelines for implementation have not been communicated. While this potentially opens the door for content providers to offer adult content, Verizon has made it clear that only the first two content categories will be allowed for now. There is no firm date at this time for when content in the later categories will be allowed.

US Premium SMS Revenues

Telephia released the first ever study on Premium SMS in the US. Over the course of the first quarter of 2007, a total of 74 million premium SMS transactions were processed across all carriers, for a total retail value of $273 million.

A couple of interesting statistics:

• Mobile content downloads dominate in value (79% of total revenue). Average premium transaction value is $7.27
  
• Off-portal content downloads now account for 32% of all mobile content downloads.
• TV based voting and sweepstakes account for 47% of total volume, but that total is probably based on a few stand out hits like 'Deal or No Deal', who accounts for half of that volume. Average premium transaction value is $1.
  
• Based on Q1 results, we can now safely say that 2007 Premium SMS revenues will exceed $1 billion.

Detailed results are posted below.

Q1 2007 Premium SMS Volume and Retail Value

Category Type	Volume (000)	Volume Share (%)	Revenue	Revenue Share (%)
Mobile Content	29,544	40%	$214.9M	79%
Voting/Sweepstakes	34,716	47%	$35.4M	13%
Chat/Community	5,497	7%	$5.7M	2%
Other	4,208	6%	$17.4M	6%

Here are some thoughts about these numbers:

• The high transaction value associated with mobile content ($7.27) clearly indicates that the vast majority of all mobile content downloads is charged on a monthly subscription basis. If that is the case, roughly 10 million users are currently signed for monthly subscriptions, or about 4% of all mobile subscribers in the US.
• Furthermore, if we assume that binary content subscriptions (ringtones, wallpapers, games, etc.) typically cost $9.99 per month, where as pure text subscriptions (horoscopes, jokes, etc.) cost $4.99, it follows that 54% of all mobile content subscribers sign up for text alerts, and 46% sign up for ringtones.
• It is clear that most premium sweepstakes and voting contests run at a $0.99 price point.
• It is interesting to see that voting+content account for over 90% of all revenues. This means that other premium sms categories such as chat, dating, and micropayments haven't really taken off yet. This is hardly surprising given the limited support amongst carriers as well as the severe restrictions that some carriers are imposing on such programs.

Verizon and Reverse Auctions

Verizon Wireless now requires all premium billed reverse auctions to include some form of added value content (text alert, joke, trivia, etc.). This is due to the changing legal landscape causing reverse auctions to be considered as games of chance and no longer games of skill. Without the added value component, reverse auctions could be viewed as an illegal form of gambling in some states.

Although this provision specifically applies to reverse auctions (and not general sweepstakes), we do feel that the next step will probably be to extend it to premium billed sweepstakes. We encourage content providers to start modifying their premium sweepstakes and reverse auction campaigns accordingly.

Cingular Off Portal Purchasing Control (OPPC) System

Cingular announces important changes to the way its Subscription and Refund Management (SRM) system will work, mainly to improve Cingular's visibility over end-user subscription status to 3rd party content.

Under the new and revised SRM system, content providers no longer need to handle the double opt-in user interaction before starting a new subscription on Cingular's SRM platform. Instead Cingular will handle the double opt-in management through its Qpass billing platform.

Here's the old message flow:


And here's the new message flow:


The new system has the advantage that Cingular customer service reps will be able to handle consumer complaints more effectively and verify consumer claims about opt-in status to specific campaigns.

For ReminderConnection customers who use the Permission Management System (PMS) no changes will be needed. ReminderConnection will handle the revised requirements transparently to our customers.

The change-over is expected to take place by the end of Q3 2007.

T-Mobile and Games/Applications

T-Mobile announced today that all J2ME games and applications need to be certified by their independent certification partner, True North Service, before they will be approved by T-Mobile and made available to T-Mobile subscribers.

This new requirement doesn't change the previous requirement that all J2ME games and applications need to be part of T-Mobile's white list of approved applications.

The new independent certification step needs to be completed before submitting your short code campaign to T-Mobile for approval, hence further lengthening the approval process and time-to-market for your campaigns. Make sure to give yourself plenty of time (at least 10-12 weeks) to go through the entire T-Mobile approval process.

If you currently sell J2ME games on a T-Mobile approved short code, you need to contact True North within 30 days to start the re-certification process.

For True North Service contact details, contact us.

Sprint Premium SMS Message Flow (Updated)

Sprint is changing the way gateway providers interact with Sprint's message delivery and billing systems. Whereas content providers just deliver the proper premium sms message to gateway providers like ReminderConnection, we work behind the scenes to (i) deliver the content to the cell phone user; (ii) initiate a billing transaction with Sprint's billing system.

Previously, we were first initiating a billing transaction before attempting to deliver the content. Sprint is now requiring us to reverse this message flow, and first attempt to deliver the content, before initiating a billing transaction.

The message flow change will take effect on Wed. May 9th between 2am and 4am PT.

Customers do not need to change anything on their side. As is the case with the other carriers, ReminderConnection will perform retries on all failed billing transactions to optimize the success billing ratio.


We don't expect this change to have any material effect on success billing ratios. It will reduce the number of complaints from consumers about being charged for content that was never delivered. On the other hand, this new system could lead to content being delivered successfully without being charged (ie. message delivery succeeds but billing fails).


UPDATE: Sprint has warned aggregators to expect a reduction in success billing ratios of up to 25-30%, part of which is due to the rationalization of delinquent subscribers on their network. However, we have no further visibility on how this will affect individual content providers.

New Minimum Rates from Alltel

Alltel is imposing a new minimum rate of $0.50 on all premium billed campaigns. Existing campaigns below this minimum may continue, but new campaigns must adhere to the new policy.

The other carriers with minima are AT&T Mobility, who requires a minimum of $0.25, and Sprint, who requires a minimum of $0.15.

Goodbye Dobson, Hello Cellular One

Dobson has completed its rebranding from Dobson/Cellular One to Cellular One. Please update your marketing materials accordingly. You may use below logos (small or large) provided you follow the Dobson branding guidelines as documented in the ReminderConnection White Paper.

Verizon Pricing Changes

Verizon has announced following price policy changes. All affected campaigns need to start adhering to this new policy by APRIL 30, 2007. We will approach ReminderConnection customers who have affected campaigns individually to assist them in the migration.

1. Weekly billing is no longer allowed. You can continue to use daily or monthly billing.

2. Chat pricing is capped at $0.99 per message.

3. Monthly subscription campaigns are capped at $20 per month.

Recycled Numbers Lawsuits

ReminderConnection has learned that several law suits have been initiated against wireless carriers regarding deactivated numbers. The complaints in these suits have to do with recipients allegedly being billed for services and content based upon authorizations received by the PREVIOUS owner of that phone number.

As detailed in a previous post (Mo. June 18, 2006) deactivated numbers are typically recycled by carriers after 3 months. Carriers provide us with lists of deactivated numbers. We provide those lists to our customers through an ftp site. Please contact us for details.

It is extremely important for all content providers to diligently take the proper actions after receiving the new disconnect list. Failure to do so may lead to consumer complaints, shut down of the short code by the carrier, or even legal action.

Alltel increases spending limits, adds support for pre-paid

As of March 7, 2007 Alltel has increased the monthly spending limit for premium services from $35 to $75. This spending limit is applied by Alltel on a PER USER basis and covers all premium SMS usage by that user in a given month. Alltel is enforcing the limit. Content providers do not need to make any changes.

At the same time, Alltel announces support for prepaid phones. The subscriber must have sufficient funds in his account for a premium transaction to succeed.

We believe that both measures will help to increase the overall SBR (Success Billing Ratio) of Alltel's network. ReminderConnection's average SBR on Alltel for 2006 was a low 45.5%, compared to an average SBR across all US carriers of 87.9%.

T-Mobile reduces impact of recent changes

T-Mobile announces today that it has made changes to its campaign provisioning fee structure as well as its refund driven outpayment penalty structure. The changes are implemented retroactively from Feb 1st, 2007 onwards.

1. The one-time campaign provisioning fee is reduced from $1,000 to $500.

2. The new outpayment penalty structure now provides an incentive in addition to penalizing customers for excessive refunds. If the refund ratio is 5% or lower, T-Mobile will increase the outpayment to customers by 2%. However, the penalties for having high refunds have increased. The new structure is detailed below:

T-Mobile Refund Table

Refund Rate	T-Mobile Revenue Share Change (%)
0%-5%	+2%
5%-7.5%	0%
7.6%-10.9%	-4.6%
11%-14.9%	-18.25%
15% or greater	-100%

We applaud the reduction of the campaign provisioning fee. We feel it's important to keep the barriers to entry as low as possible since that will result in more campaigns, more services, and more innovation.

While it's positive that the new refund related structure now has an incentive in addition to a penalty, we still feel that these measures are ill conceived because they penalize all content providers of a certain aggregator in the same way regardless of the specific refund % of any one specific content provider. Secondly, content providers have no direct control over carrier refund policies. We would think that the typical carrier margins of 35-40% on premium SMS outpayments would be sufficient to deal with refund problems. And if not, carriers always have the option to cancel a certain campaign if refunds prove to be too high or costly.

US SMS Penetration by Age Group

Forrester Research released a study on text messaging usage by age group. They estimate that consumers between ages 12 and 21 are more than twice as likely as the average adult mobile user to send messages or browse the Internet on their mobile phone.

The study also shows that among young people, text messaging is pretty much universally adopted.

Here are the numbers:

Active SMS users as % of US Households

Age Group	Active SMS User %
18-24	76%
25-34	58%
35-44	43%
45-54	33%
55-64	22%
65 and over	19%

Note: Based on US Households that owned a mobile phone in December 2006

T-Mobile Changes

[Updated Jan. 18, 2007]

Today ReminderConnection is informing its customers of rate changes that will be applicable for short code campaigns that run on T-Mobile's network. These changes are implemented with immediate effect :

1. Introduction of one-time T-Mobile campaign setup fee of $1,000. Note that T-Mobile requires that every campaign running on a short code be approved separately. Each one of these campaigns will incur a set up fee of $1,000.

2. RminderConnection's revenue share payout on T-Mobile traffic will be reduced by the percentage reflected in the table below based on the AGGREGATE T-MOBILE REFUND RATE experienced by ALL ReminderConnection customers in a given month. Note that, if the refund rate is 15% or greater, there will be no outpayment at all for that month. The refund rate is calculated by dividing the total amount of refunds issued by T-Mobile to End-Users for premium programs offered by all the aggregator's customers, by the total dollar amount of premiums billed by those customers for the relevant month. For example, if ReminderConnection experiences an aggregate refund rate of 8% based on the total refunds made by T-Mobile attributable to all ReminderConnection customers, outpayments to all ReminderConnection customers will be reduced by 2.5% in the applicable month.

T-Mobile Refund Table

Refund Rate	T-Mobile Revenue Share Minimum Reduction (%)
7.6%-10.9%	2.5%
11%-14.9%	10.00%
15% or greater	100%

Remember that short code campaigns are submitted on a per carrier basis. Hence we do offer the possibility to not submit your campaigns to T-Mobile if you feel that above measures impact the profitability of your business model.

For more information about these measures and what they mean for your business, contact us.