November 02, 2011
Text Messaging Becoming a Hotbed of Debate, Competition
Are the CTIA’s (News - Alert) new intercarrier text messaging guidelines an effort by the nation’s cellular service providers to protect the public against spam, or are they a move by those same companies to tamp down the prospects of long codes? The answer: It depends upon who you’re talking to.
David Diggs, vice president of wireless Internet development at CTIA, told TMCnet last month that the guidelines aren’t so much about distinguishing between short code and long code text messaging. Rather, he said, they aim to set industry rules around bulk messaging from A2P providers (the A stands for application) so customers are not inundated with unwanted and/or inappropriate text communications.
“You don’t get a lot of spam on SMS, and everyone’s focused on trying to keep it that way,” Diggs said, adding there is currently a lot of protection built in to short messaging.
“Where it gets interesting is where long codes get into bulk, high tonnage messaging,” he added, confirming that the guidelines suggest A2P traffic can be blocked if the wireless carrier deems it as falling under the heading of deceptive marketing practices.
Guidelines around intercarrier messaging haven’t been revisited since 2009, Diggs continued, adding that even those guidelines were somewhat ambiguous. So CTIA decided now was a good time to looking at updating them. Although revision 3 of those guidelines are now available following the CTIA work group’s vote last week, Diggs emphasized the guidelines are a work in progress and that the association continues to expand upon them with related traffic routing best practices, more refined opt-in/opt-out practices, and more.
However, Noah Rafalko, CEO of TSG Global, a VoIP and SMS text messaging service provider, believes the large wireless service providers that are CTIA members are trying to limit long code technology with guidelines that treat SMS one way and long codes another. He’s also troubled by the fact that CTIA set the new guidelines in a closed meeting.
“If you’re not invited to your voting booth, what voice do you have?” said Rafalko. “It’s not like because McDonald’s sells the most hamburgers in the world, they have the right to dictate how all hamburgers are made.”
In this comment, Rafalko is referring to the significant market power of the nation’s big cellular providers. On the second page of the new CTIA guidelines are the logos of AT&T, Cellcom, cricket, nTelos, Sprint, T-Mobile, U.S. Cellular and Verizon (News - Alert) Wireless.
“The small guy deserves a chance, too,” Rafalko said, adding that keeping newcomers out of the market hurts not only those companies but consumers as well.
Rafalko added that while he believes CTIA is calling for existing long code providers (which are more consumer focused than business focused at the moment) like Google (News - Alert) Voice and GroupMe (which Skype recently announced plans to buy) to be grandfathered in, newcomers to the long code space such as wireline CLECs may face higher hurdles to market entry. (Diggs of CTIA indicated to TMCnet that isn’t the case.)
TSG Global isn’t alone in its interest of advancing long codes. Clickatell (News - Alert) is another company that is promoting its benefits."U.S. long codes have the ability to fill a significant gap in the SMS messaging space,” said Cliff Haas, senior director of connectivity and partner management North America for Clickatell. “Small to medium organizations will find the quick implementation and relative affordability to be key enablers in their making use of SMS for their communications needs.”
Loïc Maestracci, marketing director of Zed USA, which offers multi-platform marketing solutions and value-added content services, meanwhile, told TMCnet: “There is a potential for long codes in the current market, specifically for enterprise or M2M solutions that have long term implementation, that require standard SMS charges to apply and/or international/roaming reception. Industries like healthcare, public services, call centers, business applications or even social media are the perfect candidates for long codes.”“The ease and lower cost of implementing long codes encourage many companies to use them,” Maestracci continued. “However, not many long codes have been advertised yet in the U.S. Long codes will bring new industries and usage type to message based interaction.”
Whether or not there are any motivations to its recent inter carrier messaging guidelines the CTIA has not publicly expressed, it’s clear that association members have a nice business in SMS that they most certainly are keen to protect.
As I noted in the March issue of INTERNET TELEPHONY magazine, the worldwide mobile messaging industry currently is generating revenues in excess of $150 billion, and is forecast to exceed $233 billion by 2014, according to the Portio Research report. Meanwhile, the Wall Street Journal this summer reported that AT&T and Verizon Wireless charge between 20 cents per text to $20 a month for unlimited texting, and a dollar of texting revenue produces at least 80 cents of profit compared with about 35 cents of profit from $1 in wireless data or voice services.
That June 9 article by the Wall Street Journal indicates that while texting has been big business for cellular service providers in the past, and still is, the business is under pressure on multiple fronts. According to the piece: “While U.S. cellphone users sent and received more than 1 trillion texts in the second half of 2010, according to CTIA, a wireless industry trade group, that was just an 8.7% increase from the prior six months. It was the slimmest gain since texting exploded last decade.
“Text traffic will come under more pressure in the months ahead. This week, Apple Inc., sowed off an application that will allow iPhone and iPad owners to bypass carriers and send text messages over the Internet to other people with Apple (News - Alert) devices.”
Edited by Stefanie Mosca
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