Case Study: SMS standing tall

A couple OF pubs in Dublin, Ireland, sending free drink vouchers to their customers using SMS (short messaging service) may not sound like big news, but when you get behind the novelty of it, you discover something far more newsworthy.

For one, the pubs' owners -- the McGowan family, who collected more than 5,000 cell phone numbers from customers to invite them in for a free birthday drink -- saw a 25 percent improvement in response using SMS, compared with the direct mail they had used previously. In addition, the cost of an SMS message is much lower than the cost of postage.

Behind the direct SMS marketing strategy is a Dublin-based company called Saadian Technologies Ltd. and its B2M (Business to Mobile) technology.

Deployed as a Web service, B2M Version 2.0 allows business users to create an SMS development environment that gives them the ability to define large groups to whom to send messages, along with a pop-up calendar to set delivery dates, an in-box for replies, and more.

This is not a commercial for Saadian but an indication that SMS, an extremely popular social messaging device everywhere on the globe but here in the United States, is headed off in a business direction.

AT&T Wireless Services Inc. (AWS) announced at the end of May a service that in some respects is similar to Saadian's, only for large enterprise-level companies. The service is targeted at the airline industry, financial services, dispatch companies, utility companies, and any company that needs a large volume of messages sent on a daily basis. The pricing and volumes stop at 250,000 messages per month, which would cost US$10,000 plus five cents for each additional message.

Obviously, airlines could send text messages about flight schedule changes, brokerage houses could deliver stock price updates, or a large sales force in the field could get a real-time message about a change in price or inventory.

In the States, about 300 million to 350 million text messages are sent every month among cell phones, according to one research organization. In Europe, it is a staggering 30 billion messages. The single most important reason for the wide-scale adoption of SMS elsewhere is the fact that it is carrier-independent.

Agreements among the major carriers here are just now coming together, and we may be seeing a similar explosion in adoption of SMS.

Forty percent of all AWS text messaging subscribers send messages to users on other networks. The AWS enterprise service at the moment works only on the AWS footprint, as Drew McCahill, director of enterprise data offer at AWS, in Paramus, N.J., puts it. McCahill said the charging model wouldn't work well at volumes as high as a quarter of a million messages per month if messages using the AWS gateway were destined for subscribers on other networks.

"Until we straighten some of those things out, we will have to delay [interoperability]," McCahill said.

Will SMS take off in the United States? E-mail me at

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