SMS Short codes

November 22, 2009 § 1 Comment

Over the last couple of weeks, I have been interacting with SMS short code providers on the costs involved to buy one and usage for a particular mobile VAS application. Nowadays, short codes are used for VAS primarily (value added services-weather reports, stock market updates, news, ring-tones, wallpapers, marketing campaigns, product promotions, etc.)

Thought, I would present here what I got from those interactions. My interest in this is from an application developer’s point of view. Anyway, this as a FYI post which might help others looking out for same stuff. Information presented below is not specific to one SMS provider. That’s why some of the costs would be range than a single number.

Some terminologies

Short code: 5- 9 digits (56060, 5601234, etc)

Long codes: 10 digits (Just like our normal mobile numbers, but a national level number setup exclusively under short code usage)

Forwarding URL: Any SMS to a particular number could be forwarded to a URL, say a java servlet hosted on a server, with complete info, sender number, network, entire SMS content. This helps the application developer to use the keywords or ICICI bank staff to sort out into different buckets. From here, a reply could be sent back which could be a standard one like, “Thanks for contacting us. We will get back shortly” or a more customized one based on the SMS content like in downloading ringtones or wallpapers.

Shared code & Keywords: When a code is shared by more than 1 company based on keywords, say, if the SMS is ICICI Mumbai loan, then ICICI is the primary keyword, Mumbai comes as secondary keyword, and loan is the content part. Now, SMS provider would look out for those keywords and based on that, it is identified as one sent in regard to ICICI. In shared code, for each primary keyword, charges need to be paid.

Dedicated code: When a number say 56060 is used only by your company. Charges are higher than shared. Unlimited primary & secondary keywords. All the costs you find below are for dedicated only.

Cost & Time involved for setup, maintenance

  1. 5 digit short code: As per the service providers, it would take almost 1 year to setup with upfront payment over 1 crore. Maintenance cost also comes huge. Or you could read this simply as ‘Affordable only for national players, like AIrtel, SBI, etc’. For every SMS sent by customer, a minimum of Rs. 3 is charged to customer. Can be changed, but involves money.
  2. Long codes 6-9 digits: Costs 30k-15k for setup which could take 3-4 months and 30k-15k as monthly rent. For every SMS sent by customer, a minimum of Rs. 3 is charged to customer. If the sender is to be charged more than Rs. 3 then, setup costs goes up to 1 lakh and monthly rental of 50k.
  3. Long codes 10 digit: Costs 10k-7k for setup which takes 2-3 months, and 10k-7k as monthly rent.

Free reply sms

In all the above 3 plans, the product/application owner gets to send 1 free SMS reply for every incoming SMS received except with 10 digit short codes. But here, you could tie up with a 3rd party vendors. The rates could go down to 3-5 paise/sms for over 1 crore sms’s. Google, bulk sms providers India

Another interesting part is, our personal SIM cards can be inserted to a GSM modem and connected to a computer with RF serial cable and programmed to read the SMS’s sent to this number. But, not sure if it could be used for commercial purposes.

Deducting  money from sender: This is the most important & least regulated part in the whole process. TRAI should be doing something on this pretty soon if it needs Mobile VAS to gain growth.

  1. Charge to pre-paid balance or bill (postpaid): Revenue sharing with operator which could eat up as much as 75% of profits. Maximum amount that could be charged via operator is around 15-20 rupees.
  2. Using Java application: Connect online banking details for the 1st time and use the same subsequently. No revenue sharing. No limit to amount that could be charged
  3. IVR(Interactive-Voice-Response) technology: A SMS sent by customer/sender is followed up with a call where we punch in our credit/debit card info from which money could be deducted. No revenue sharing. No limit to amount that could be charged
  4. Mobile/Online wallet: Cost is deducted from a pre-filled wallet. It works in exactly the same way as a  balance top-up for pre paid sim cards.

As far as I learnt, there is not a single company which has deals with all 24 telecom operators (as of Nov 2009), so, the application developer needs to establish a contract with each one of them initially. Although, it should not be as tough as it reads like. Initially the product may be launched only in metros or single state only. So, work involved could come down drastically.

Following are the providers I spoke to:

Hmm, That’s it! I would update this post, if I go ahead with a service provider for my application 🙂

Arun Vallappan


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