Way OT but... How does SMS work outside US markets?

[windtrader]

What makes SMS deployment in the US so different than Euro and other international markets?

SMS usage is quite pervasive around the globe and there are a number of SMS gateways, resellers, and add-on SMS tools and such available in Europe. For some reason in the US, there is very little in the way of third party software and SMS gateways. I know it is not lack of greed, so it must be there is no opportunity to make any money on it.

Just few major cell carriers covering the entire US: Cingular, Verizon, T-Mobile, Sprint. Text and multimedia messaging (SMS, MMS) is typically not bundled into plans, or if it is, there is some nominal amount of included messages. Most offer add-on plans for messaging. With open protocols like HTTP, it is free and easy to send a message to a cell witin their network. Email to SMS is also quite common. The revenue is captured at the cell phone and usually both ways (inbound and outbound).

Given GSM is fairly ubiquititous (at least on all newer hardware), what are the differences between the US and Euro/ international cell markets that seem to provide no or very little incentive for third party SMS tools and value added services? Do the major cell carriers have this locked up so tight or ...?

Any links to get enlightened are welcome.

[lazyn00b]

Cell phone service in the US is so cheap, and disposable income so high, there really isn't any incentive to use text messages here. Why text when you can talk? I've had T-Mobile for over a year, and I've never even sent one text message!

[mpucoder]

Besides, all the US cell phone carriers have their own free gateways. eg Verizon Wireless will accept email at ##########@vtext.com, where ### is the 10 digit phone number, and forward as an SMS message to the phone.

[sysKin]

Why text when you can talk?
This is exactly the reason - there's a completely different approach to SMS in the US than in Europe/Asia/Au/etc.

Outside the US, SMS has very quickly became a very popular method of communication - much more than talking.

I remember some news a couple of years ago saying that a single Czech provider sends ten times more SMSs than entire US combined.

:)

[windtrader]

Thanks for the replies. I do respect and appreciate the folks here as quite tech savvy as well as having that extra "crafty" spirit. :cool:

Besides, all the US cell phone carriers have their own free gateways. eg Verizon Wireless will accept email at ##########@vtext.com, where ### is the 10 digit phone number, and forward as an SMS message to the phone. This was my take on it - that the US has a handful of cell carriers and the fact they all provide free sending of SMS text, there is essentially zero market for the third party SMS gateways you see outside the US.

Certainly, SMS gateways and other such intersystem SMS systems are utilized to get message around their network as well as betwen other networks but the market for such stuff is just the major US carriers.

Outside the US, SMS has very quickly became a very popular method of communication - much more than talking.

Cell phone service in the US is so cheap

Are US cell phone charges that much cheaper in relative and absolute money terms than outside of North America?

Is voice usage more costly than text messaging, like a one minute voice call vs a text message or two?

Are there sufficient cell carriers to chose and ensure reasonable competition?

Are the cell markets regulated to a greater extent than the US? I remember about 5 years ago interacting a lot with someone in Gernany and found it shocking how much it was costing just for DUN (plain phone) ISP service, while we had unlimited use DSL and cable options.

thx again

[Cheesus]

SMS seems to be indelibly ingrained in the culture of Europe now.
I think it started off as a bit of a teenage craze because it was so much cheaper than phoning, people loved it, it became cool and just stuck.
I also heard that mobiles took off a lot quicker in Europe and Asia. Maybe that delay in the US uptake allowed for cheaper phone calls, therefore no need for people to play around with SMS and the process that occured in Europe (and other places around the globe) just never happened.

[windtrader]

I also heard that mobiles took off a lot quicker in Europe and Asia. The GSM standard took hold much faster than the US, as the US market had a huge legacy of analog CDMA, TDMA, and older GPRS technology already deployed and the carriers were very resistant to migrate to GSM. Cingular came on the market as the first GSM only carrier and that really began the mass GSM rollout.

btw - what is the state of EV-DO in Euro? Here Verizon has a big rollout and Sprint is preparing for a huge launch mid November.

[int 21h]

In Europe, rate structures are sufficiently different that SMS as a feature of service, instead of an add-on is more common.

In the US, service initially evolved with a pricewar that had carriers fighting for customers with low price, very basic plans. Many of those same carriers are now out of business or absorbed into other carriers, and consumers are now looking for feature rich phones and plans.

I guess it really is an evolution of both service and customers. When mobile phones debuted, they were really marketed towards a less technically saavy generation. Now phones are being marketed to a generation already very familiar with computers, gaming consoles, etc.

There are commercial Web to SMS gateways for U.S. subscribers that advertise a 95%+ rate of coverage, but I think they've really not taken off yet, partly because of what mpucoder showed.

[Inventive Software]

SMS is becoming more popular in the UK than talking, because companies have dirt cheap offers on texting because it reduces their bandwidth costs. Anybody in the UK remember the Virgin Mobile ads where you could text another Virgin Mobile for 3p? BTW, some of the TV ads were quite funny!

I almost always text, partly because it's cheaper than making a call, and easier if you wanna ask a quick question.

[Laughing Man]

Well yeah it could be cheaper to text then to call. However..recently the 3 major cell phone companies in the US (Verizon, Sprint-Nextel, and Cingular) offer free in network calling (one of them started it and the other two followed suit)

Meaning all your calls to anyone in the same network are free. I take well advantage of this with calls to my gf since we're both on Sprint-Nextel.

So now it's a free phone call compared to a text message *assuming they're on the same network*. Though I think Verizon is starting to offer free text messaging to anyone on the same network..

[lazyn00b]

Are US cell phone charges that much cheaper in relative and absolute money terms than outside of North America?

Is voice usage more costly than text messaging, like a one minute voice call vs a text message or two?


Where I live (Arizona) Cricket Communications offers cellphone service for only $32/month that allows you to make all the local calls you want, anytime - there are never any "per minute" charges. This service is very popular with teenagers and college students. Hell, even little kids have cellphones here. But if you want to send text messages you have to pay extra! My T-Mobile plan is about $40/month with 600 anytime minutes (including long distance!) and totally free nights and weekends - but again, text costs extra.

Where Americans (kids) are prone to run up charges is with the friggin' ringtones. Just ask my little sister - LOL!

[windtrader]

It does seem cell service plans here in the US are designed to make voice calling as cheap as possible, yet text messaging carries added fees. As stated earlier, from a technology infrastructure standpoint, it is far less taxing and resource intensive to pass a text message vs a carrying a live cell call.

So why would the cell carriers not encourage customers to send a text message instead of making a call? Because it costs them real money. I've developed a new theory why text messaging carries a premium. Even though it costs the carrier less to send the text page, look at its place in business critical functions that still rely on text messages and inherent business necessity for such services.

Who's still carries pagers today? Doctors, lawyers, IT production tech support, on call critical services personnel are but a few examples. A HUGE legacy paging market still exists out there.

I spoke to mobile365 yesterday, asking about application to person messaging paging services for my new company. He said this still a new area for them but they route 2 BILLION pages a year, each costing a few pennies each. That adds up to a lot of dollars. The reason for the charge is the costs all carriers have to pay to have a text message/page routed over the industry paging backbone, which is not free. It's just a gateway allowing all carriers to send a text mesage through, letting the paging carriers handle all the addressing, routing, and message delivery.

All major carriers have bulk volume SMS message send/receive contracts and it costs them real money, real checks to these third party intermediaries. Thus, commercial carriers are obligated to charge the extra fee to cover their out-of-pocket costs plus a profit.

Additionally, most US carrier plans have xxx minutes free, then charge xx for minutes in excess of the limits. I don't know how much profit comes from these overage fees but I bet it is significant. Therefore, it is in the carrier's interest to get one's monthly usage up and over the included plan minutes as quickly as possible in the billing cycle. Text message usage probably reduces the chance that over-plan minutes will be incurred.

[Laughing Man]

Where Americans (kids) are prone to run up charges is with the friggin' ringtones. Just ask my little sister - LOL!

Yeah I do notice a ton of money is spent on ringtones..never spent any myself though. I just made them on my computer and sent them over to my cell phone.

[Oki]

Most people doesn't know the big fat difference between the US and EU market for mobile communications. In the states, the user pays only his part of the communication. I mean, If A calls B from mobile to mobile, A (the caller) pays the connecton from his phone to the network, and B (the rereceiver) pays from the network to his cell phone. In other words, receiving a call cost you (air time), receiving a SMS cost you and in Europe only the caller pays, but a lot more!!!!!!

When I fist arrived to the states from Europe I thought that the US model was abussive. now I am convinced that it is completely fair. The European markets are too controlled and flat fees are now arising in some providers and only for business.

I do not mind to pay my mobility, and it is not fair that a caller to my mobile phone pays my mobility. The European model is abussive, and the market can not grows as fast as it could do.

SMS in US is useless, SMS in EU is affordable.

This is a question to all the people in Europe: For the same price what do you prefer, talk or text?

regards,
Oki

[windtrader]

Thanks for the insights about the financial aspects in Euro consumer wireless. In Euro, if I understand correctly, only the caller pays for messaging (text or voice).

This may explain why third SMS gateways are a commercial business models, in that they compete to offer lower rates to send SMS. As mentioned earlier, in the US, all major carriers offer free SMS gateways to custmers in their network. The only commercial SMS gateways in the US are those collecting a fee for routing SMS messages between the carriers.

>> SMS in US is useless, SMS in EU is affordable. <<
>> For the same price what do you prefer, talk or text? <<

It seems you are saying that in Euro the cost of voice is a lot higher than a text message and here in the US the cost of voice calling is as cheaper, maybe even cheaper than a text message?

Can you give a typical cost of a SMS message and call/connect time/unit that Euro users pays? Maybe just note a charge next to the following lines.

voice
sender, cell || receiver,cell
sender, cell || receiver,land
sender, land || receiver,cell
l
SMS
sender, cell || recever, cell
sender, comp. app. || receiver,cell
(i.e. email, alerts, etc)
sender, cell || receiver, email

Thanks!

[videomixer9]

With new flatrates here for mobile phoning I'd prefer phoning to the selected costumers or landline for free haha ... to bad most flatrates only cover landlines and other users of the same mobile phone company ... but for 25€ incl. SMS as much as you want with the lowest all offer it's quite cheap imo ...

I still think it's funny to see US people talk about T-Mobile which is one of the old german monopolist phoning companies ...

however in whole europe prices differ high with SMS ... from sms flatrates to 7 cents upto 39c for some prepaid offers ... imo SMS is useless, I think in japan they never had SMS but just used regular emailing services coupled to the phones ... the receiver paying something for inner country calls/SMS is considered fraud by most ppl here.

BTW. here in germany we had unlimited DSL offers 5 years ago too ... the cost were still high but nowadays you get 6mbit - 16mbit pretty cheap too ... however flatrate and DSL is usually billed seperatly. Cheapest DSL flatrate costs 49€ once and 0€/m and regular price is now at ~9€. 6mbit service may be still bit more expensive than in the USA but with a price of ~30€ it's quite okay now. However I guess france kicks ass there with 20mbit for ~20€ all incl. with phoning.

Whatever it is ... a mobile phone is still nothing I need for something else than calling my dad when my crappy old car is fucked up again :)