E-mail to SMS Gateways

In my opening post I listed what I consider to be some of the larger threats to mobile marketing:

• List Brokering
• E-mail to SMS Gateways
• Desktop SMS Systems
• Misrepresenting mobile marketing effectiveness

Today's topic is E-mail to SMS Gateways.

What is an E-mail to SMS Gateway?

There are a few reference points that need to be discussed in order to frame this correctly. One of the most important is that I'm assuming that you already understand SMS. I'm also assuming that you understand E-mail. (I'm not going to give you a webopedia link for that one because I can't believe you're reading a BLOG and don't have an e-mail address...)

An E-mail to SMS Gateway is a server that is connected on one side to the public internet with ability to send and receive e-mail - and with a separate interface connected to the closed mobile phone network. Based on each e-mail received by this gateway machine the server composes and sends one or more SMS messages. Recipients of the message are typically formatted in the To:/Cc: fields of the e-mail and the body of the e-mail is typically the body of the SMS text message.

Great technology! What's the risk?

In general, both business and consumers are quick to adopt this new means of communicating via SMS. By sending an e-mail you don't have to hunt-n-peck out your message on the tiny buttons on your phone. And business can send bulk e-mails to go directly from their computer without any special software. (Do you smell SPAM?) And best of all - you don't have to pay for the messages!

SMS in Europe is a service that operates under a fundamental business principle known as: Sender Pays. In practice this means that regardless if the SMS message is sent from one consumer to another - or from an application to a consumer - the cost of the message is paid by the originator (or sender) of the message. Consumers typically are not charged to receive SMS messages. This business model has worked for at least the last 7+ years and is well understood by both the public and the commercial groups using SMS messaging. And if there is no way to charge someone for using the E-mail to SMS gateway - no way to charge the sender - then there is no way for the operator to make money. So guess what? In Europe there aren't any E-mail to SMS Gateways.

However, in US/North America things are different. First - SMS messaging didn't even begin to take off until sometime in October 2001. It was at that time when CTIA made the case for all the carriers (In Europe mobile telephone companies are called Operators or OpCos - but in the US/North America they are called Carriers) to establish connectivity so that if someone sent a text message from one carrier (say Sprint) to a subscriber on another carrier (say AT&T Wireless) - that the message would get through. In April 2002 Wireless Week wrote that Verizon became the final one of the big 5 in the US to offer SMS Interop. [WirelessWeek.com]

And even when SMS messaging started taking off - the US/North America went for a different business model: Both Parties Pay -- In many cases subscribers not only pay to send messages, but they actually pay to RECEIVE messages. Compounding the confusion and continuing to deviate from a tried and true model of GSM Operators in Europe - the US/North America created and even lightly promoted their E-mail to SMS Gateways - making the onslaught of mobile SPAM even easier.

Having an E-mail to SMS Gateway is similar to the environment in Japan. Japan uses SMS messaging, but they also promote e-mail directly to people's mobile phone. And e-mail to your mobile phone is just as susceptible to SPAM as e-mail to your personal e-mail account. After years of trying to compare the success of mobile technology and applications in Japan to forecast the success of applications and technology in the US (which have repeatedly proven to be false basis for comparison) this comparison is accurate. Having an E-mail to SMS gateway will have the same effect, costs, problems as the current E-mail to mobile environment in Japan.

So, what are US/North American Carriers Doing?

There are two obvious solutions:

• Close the E-mail gateways and adopt a system similar to the European/GSM model
• Spend US$Thousands on Anti-SPAM software with limited effectiveness at each E-mail to SMS Gateway

There are likely other less obvious solutions with both business and technical components - but these are the top 2. Let's look at them one at a time.

Close the E-mail Gateway?

I had occasion to talk to one of the top executives at Verizon the other day and I pointedly asked the question: "What's the business model in favor of E-mail to SMS Gateways?"

The answer I got surprised me - I must admit. Verizon has had an e-mail to SMS Gateway for so long that they don't feel they can close it down. Consumers and business have so embedded access to these gateways into their business processes and daily communications that to shut them down - even if you provide them a newly viable alternative - would seriously impact their business.

If you add to this the fact that most of the other US Carriers also have E-mail to SMS gateways - if Verizon were to shut down their gateway it would result in some amount of subscriber churn as people moved to another carrier in search of the ability to send SMS via E-mail. In essence, unless all the carriers took the move together - no single carrier is going to shut down their E-mail to SMS Gateway.

And as a result - Carriers are spending $Thousands on anti-SPAM software to filter out the SPAM from the e-mail. Sadly - this is a less than perfect process. When Yahoo! filters my e-mail my SPAM gets trapped in a bulk folder and I can go and check for something that shouldn't have been filtered and find it and pull it back. I have no such facility with my E-mail to SMS. It simply doesn't turn up on my phone - and there's no where to go and look for it or even an indication that something got filtered!

E-mail companies that provide Anti-SPAM solutions love this - as a consumer I hate it. But as they'd say here in Britain: Hey Ho. I guess we can't put the genie back in the bottle right now.

How Big is the Threat?

E-mail to SMS Gateways are a threat to mobile marketing because companies will use/abuse them to the full extent that they can get away with - and will use all of their anti-SPAM-filtering trickery and deceipt available. US/North American carriers will continue to invest significantly in trying to thwart the abuse of their networks without ever biting the bullet and really fixing the problem.

Considering the US/North American business model of both parties pay I would say that e-mail SPAM showing up on people's phones, for which they are charged, will cause a significant backlash that might result in a complete shutdown on a person by person basis. Individual subscribers will phone up the carrier and say, "I do not want to receive ANY text messages because I keep getting charged for all of this text message SPAM." - And that will be the end of that.

What do I suggest? I suggest that the US Carriers continue to build solid relationships with reputable SMS Aggregators like Quios, M-Qube, Empower and others - and over time to migrate the business of E-mail to SMS traffic to these aggregators with a view to eventually shutting down E-mail to SMS Gateways. I also fully promote the change in business model to Sender Pays in support of the new model. It won't be an easy road to go - but it will have the desired outcome.

Eliminating E-mail to SMS Gateways will result in long term revenues and improved customer satisfaction from mobile marketing campaigns through the virtual elimination of SPAM through strict control of access to the mobile phone network through reputable SMS Aggregators.

I welcome your comments and questions regarding this topic. Please check back for an update on topic #3: Desktop SMS Systems

Best regards,

Troy

Sr. Consultant - Mobile Marketing
Pocket Reach Solutions, LLC