Operators block SMS messages sent via Web

Signaling that sending SMS (Short Message Service) messages via the Internet might soon cost money, two Dutch mobile phone operators have blocked incoming SMS text messages sent via several Web sites and ICQ instant messaging software.

KPN Mobile NV and Dutchtone NV want to see cash. The operators, that together serve about 6.2 million of the roughly 11 million Dutch cell phone users, say they have to allocate space on their network to carry the large volume of messages sent to their customers via the Internet, but don't get a penny for doing so.

Both operators have blocked incoming messages from South Africa's M-Cell Ltd., which operates the popular SMS Web site MTNSMS.com, powers the SMS functionality in ICQ and is the parent of mobile operator Mobile Telephone Networks (MTN). In addition, Dutchtone has put a stop on text messages coming from Swisscom Ltd. and MM02 PLC (formerly BT Cellnet PLC).

"Over 80 percent of the incoming international SMS traffic comes from MTN, Swisscom and BT Cellnet. It doesn't make us any money and it takes up network capacity that we would rather use to allow our customers to make phone calls," said Kiki van Erven, a spokeswoman for Dutchtone, a subsidiary of Orange SA.

"The SMS messages are given to us for delivery. It takes network capacity to do that, so it costs us money. There is hardly any SMS traffic from our network to MTN's network," said KPN Mobile spokeswoman Caroline Ubachs.

KPN and Dutchtone aren't the only ones throwing up SMS blockades; it is an international problem, said Pia Rogers, a spokeswoman for Swisscom.

"Other operators have also blocked SMS messages coming from Swisscom. They don't make any money for distributing international SMS messages. Also, we distribute bulk SMS for advertisers, which has led to objections," she said.

Swisscom has been blacklisted by 20 operators, including Orange in France, Telefónica SA in Spain, Telecom Italia Mobile SpA in Italy, Telstra Corp. Ltd. in Australia and Pacific Bell Corp. in the U.S.

Airborn, the part of M-Cell that handles Web SMS services, doesn't understand the operators, said Ari Kahn, co-founder of Airborn.

"There is significant revenue generated around the world based on our service. We are stimulating multiple millions of dollars in revenue. As a result of our messages people send messages and call," Kahn said.

Sending a text message from a Web site or from ICQ is free, while there is a charge for sending a message from a mobile phone. SMS is seen as a cash cow for mobile operators. Sending a message costs about US$0.20 with the popular prepaid products from KPN and Dutchtone. The cost for SMS hasn't dropped in line with the price of mobile voice calls.

The estimated 500 million GSM (Global System for Mobile Communications) subscribers worldwide will send more than 200 billion SMS messages in 2001, according to the GSM Association.

"We want to cut a deal with MTN, Swisscom and BT Cellnet, but we haven't been able to yet," said Dutchtone's Van Erven.

KPN also seeks an agreement with MTN, said Ubachs, confirming also that the SMS block isn't just a local Dutch thing, but that many operators are trying to get some money out of Web and SMS.

"Other operators are also working on getting paid for carrying SMS messages sent via the Internet. This is an international trend and we don't rule out blocking other operators," said Ubachs.

Airborn's Kahn said his company is open to talks.

"We don't understand why operators would see this as a threat and a loss. If operators have any issues, we have an open door and open arms and would like to address any problems they have," he said.

Disappointed users of MTNSMS.com complain in a forum on the SMS service Web site.

"My girlfriend is on KPN and she's 1300 kilometers away from me right now. I think they (KPN) are losing two customers this way and I've been with KPN for 4 years now," wrote one disappointed KPN customer.

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