Premium Billing on US Cellular

We're happy to announce the availability of Premium Billing on US Cellular. Only text-based single purchase programs (no binary, no subscriptions) are currently supported with price points ranging from $0.50 up to $30. US Cellular consumers have a global spending limit of $50 per account per calendar month, enforced by US Cellular.

All campaigns need to comply with MMA Guidelines an the USCC Rule Book (more details to follow).

US Cellular has over 6 million subscribers in 189 markets in 26 states (see coverage map - areas in blue). The company has converted its network to CDMA-1X digital technology, adding more voice capacity, high-speed data products and features, and expanded coverage areas. A small percentage of the U.S. Cellular subscriber base is pre-paid customers not eligible for premium traffic at this time which will be available in the future.

Verizon Wireless Monthly Spending Cap

Verizon Wireless imposes a monthly spending cap of $100. Please note that this spending cap is to be applied on a calendar-month basis. This means that if someone signs up for a mobile chat campaign on September 28th, he can spend up to $100 between September 28th and September 30th, and another $100 from October 1st to October 31st.

T-Mobile Playbook Changes

T-Mobile released a new version of its short code playbook, detailing all requirements content providers need to adhere to when running mobile campaigns on T-Mobile's network. As usual, T-Mobile does not allow 'grandfathering-in' of existing campaigns, meaning that all current campaigns need to be in compliance with the new guidelines within 30 days from today.

The playbook has grown to a massive 45 pages and is to be used in conjunction with the MMA Best Practices guidelines which are also mandatory.

The key changes in the current version (version 6) of the playbook are:

• Sweepstake campaigns are approved on a case-by-case basis and if charged at a premium rate, need to include a piece of downloadable content for the premium charge.
  
• Premium Interactive TV campaigns are approved on a case-by-case basis and may require on-air visual and verbal call out of pricing and Ts&Cs. Only one-time events are allowed, no subscription billing.
  
• Opt-in and opt-out via a mobile internet browser (WAP page) is now allowed.
  
• WAP Billing is now offered as an alternative to PSMS billing.
  
• Promotional or complimentary downloadable content is now allowed on a case-by-case basis if the download is tied to a specific promotional campaign for a 'non-mobile' product or service.
  
• The restrictions on downloadable applications are relaxed. Both non-networked and networked applications and games may be permitted as long as they have been certified by True North Services (TNS), T-Mobile's third party application certifier. However, applications and networked games, if approved, are only available to T-Mobile subscribers with unlimited Internet access.

Verizon Phone Blocking

Verizon now allows subscribers to block the delivery of Premium Billed SMS messages. When a content provider attempts to send a PSMS message to a blocked phone, Verizon will return a specific error code, and the content provider needs to send a zero rated message to the subscriber to inform him of the blocking.

Verizon will also block the delivery of MMS messages to subscribers of Verizon resellers such as Tracfone, Airvoice, Page Plus, or West End, etc. A specific error message will be returned.

If the content provider observes this error during the delivery of a message that is part of a subscription, the content provider needs to cancel the subscription, and confirm to the subscriber that his subscription has been canceled.

Monthly subscription reminder messages

The Consumer Best Practices Guidelines, issued by the Mobile Marketing Association (MMA), specify that all subscription campaigns require a monthly reminder message. Before a program is renewed, a renewal message needs to be sent to the subscriber reminding him/her that the subscription is about to be renewed. The reminder message needs to specify the pricing as well as opt-out instructions. The guidelines are silent on how much lead time a content provider needs to give the consumer before actually renewing the subscription.

All US carriers require content providers to implement the MMA guidelines, but some carriers impose additional restrictions.

Verizon Wireless announces that consumers should be given at least a 2 business day lead time before a subscription gets renewed. This means that the monthly notification message needs to be sent out 2 business days before the renewal Premium SMS message is initiated.

Many content providers have been sending out renewal messages 10 or 20 minutes before sending out the premium sms message. This is no longer allowed by Verizon.

T-Mobile and sweepstakes

Not surprisingly, T-Mobile is now requiring that any end-user who is participating in a premium sweepstakes campaign is getting some mobile content delivered to the phone in return for the premium charge. Technically, the user is paying for the mobile content, and is getting the sweepstakes entry for free

As mentioned here, Verizon Wireless has a very similar requirement and I expect that other carriers will follow pretty soon.

I suspect that these changes are the direct result of the class action lawsuit initiated by a viewer in Georgia who participated in the 'get rich with Trump' mobile sweepstakes campaign while watching The Apprentice on NBC. See here and here for more details about the lawsuit.

New AT&T Branding Guidelines

With immediate effect, AT&T no longer allows the use of its logos and trademarks by off-portal content providers and aggregators. This means that all official branding logos and AT&T registered trademarks MUST BE REMOVED IMMEDIATELY from all consumer facing materials, such as websites, brochures, advertising, etc.

In promoting products and services, content providers should make it clear that they are the sole provider of services. Promotional material should not imply that AT&T provides the service, but only that your service can be purchased by AT&T subscribers.

Any reference to AT&T needs to be made using plain text.

AT&T's auditing partner, Accenture, will start auditing 3rd party websites and advertising for infringement of the above rules within 2 weeks.

Please make sure to remove all infringing AT&T references from your promotional materials asap to avoid possible cancellation of your short codes.

Americans 4 years behind the UK in SMS adoption

While SMS adoption has been increasing rapidly in the US, it is clear that the overall development of the market is still in its infancy compared to Europe. The IntoMobile blog has some interesting statistics about adoption differences. For more details, check out Tomi T Ahonen's article.Verizon Wireless has just reached the '1 SMS sent per day per user' mark, which happened in the UK 4 years ago. Today, we're at 6 SMS per day per user in the UK, 5 in Ireland, 10 in South Korea, and 15 in the Philippines!

Verizon limits Premium SMS tariff to $9.99

Verizon Wireless announces an important change to their handling of new premium SMS campaigns. Effective immediately, the maximum price point available for new premium short code based campaigns will be $9.99.

This change only applies to new campaigns that are submitted to Verizon for approval. Campaigns that are currently running on price points higher than $9.99 can continue to do so.

New MMA documents

The MMA has released a new version of its Consumer Best Practices Guidelines, which can be downloaded here. The key changes are:

• Use of 'Free' has been relaxed. It used to be the case that the word FREE could not be associated in any way with a premium billed campaign (e.g. 'sign up now and receive the first 5 alerts FREE'). This is now possible, with certain restrictions.


• Marketing to children (anyone under the age of 13). The MMA requires content providers to adhere to COPPA, and also imposes additional restrictions in how mobile campaigns are being promoted.


• Restrictions on use of single opt-in for Participation TV programs has been made more specific. Restrictions include maximum price ($1.49), transaction-only billing, and use of both verbal and visual pricing instructions during the call-to-action.


• The Best Practices document now also includes guidelines for WAP services and IVR based opt-in mechanisms.


• Further restrictions on running chat programs.

The MMA has also released two interesting documents providing some background information about running off-deck services and creating successful mobile marketing campaigns.

• 'Off Portal - An introduction to the Market Opportunity' introduces the reader to the world of direct-to-consumer mobile services, the market opportunity, and the best practices on how to create an off-portal service.


• 'Understanding Mobile Marketing - Technology and Reach' describes the opportunity of using short codes and mobile technology to create interactive marketing campaigns.

While these documents are certainly useful, it is good to keep in mind that these are 'sales documents', mainly written to promote the use of mobile services, hence not necessarily very objective, and most definitely overly optimistic in describing the overall market potential. One example: the mobile marketing case studies tend to be very long on descriptions, but very short on actual results. Hmmm.... now, why would that be ?

Change in Verizon Binary Message Flow

(Updated: July 18, 2007)

Verizon is implementing a new billing mechanism to improve success billing ratios (SBR) for Surepay customers. Surepay is Verizon's prepaid brand.

The change involves 2 elements:

1. Change in message flow. Premium billing of the subscriber should no longer happen on the WAP Push message, but through a separate 'thank you' SMS message, as is the case with the other carriers. The 'thank you' message should only be sent after the WAP Push message was successfully delivered. the customer has received a handset delivery receipt, indicating that the content was successfully delivered to the subscriber.

2. Change in billing API.

Quios customers need not worry about the change in the billing API. This change will be handled by Quios without any customer impact. However, Quios customers will need to make the proper message flow changes. The deadline for implementing these changes is August 10, 2007. Certification requests entered after July 16, 2007 will also need to adhere to the new message flow. Please contact your account representative in case of questions.

Sprint Payment Re-Capture

Carriers have the right to deduct any non-collectible premium SMS revenue from the outpayment made to content providers. If the outpayment was already made, they have the right to reduce future outpayments to account for past uncollectible amounts. We haven't seen this happen ... until now.

Sprint has informed us of their plans to 're-capture' payments made to content providers for uncollectible revenue as well as refunds, and do so retro-actively starting January 2007. Details on the possible negative impact for content providers are not known at this time, and as soon as we receive further information, we will immediately inform the impacted content providers.

Summary Table of Carrier Requirements/Restrictions

It's often hard to keep track of what is allowed and what isn't. Because of that, we've created a table summarizing all carrier requirements and restrictions related to operating common short code (CSC) campaigns, both premium and standard rated, in the US.

You can download the table here. Let me know what you think. Drop me an email: marc at quios dot net.

Sprint Refunds and Message Flow Changes

Starting with the June billing period, Sprint will start deducting refunds from the outpayments made to content providers. Previously, Sprint was not accounting for refunds. Sprint has also implemented a new message flow whereby subscribers are 'validated' before the premium content is delivered and billed. This means that subscribers who cannot be billed will no longer be able to receive premium messages or make phone calls. These subscribers are 'hotlined' which means that when they attempt to make a phone call, they will be redirected to Sprint's customer service hotline. Quios will start returning a specific error code for hotlined subscribers.

Global Messaging 2007

The fourth annual Global Messaging conference took place this year in Monte Carlo. Analysts are predicting a continuing growth in the volume of SMS messages sent worldwide. In 2005, yearly SMS traffic reached the 1 trillion level. For 2010, estimates vary between 2.3 trillion and 3.2 trillion.

According to John Delaney, principal analyst in Ovum's Consumer Group, there are five reasons for the success of SMS:

1. Simplicity: everyone can use it.
   
2. Ubiquity: everyone has it.
   
3. Awareness: everyone knows about it.
   
4. Critical Mass: everyone can receive SMS and knows how to read it.
   
5. Reliability: SMS messages don't get lost all that often.

According to Cellular News "A key industry trend reiterated at Global Messaging 2007 was that in the mature markets, mobile networks are starting to acknowledge the important role of wireless applications service providers (WASPs) and aggregators in growing the A2P market. In the experience of mobile operators, the higher percentage paid out to WASPs, the more revenue the mobile operator makes from messaging. Mobile operators in the United Kingdom currently offer the highest payouts in the global messaging market."

Let's hope U.S. carriers get the 'message'.

Verizon Content Rating

Verizon is in the early stages of releasing a new content rating system for off-portal content. All short code programs will need to be categorized in one of four different content categories. All Verizon subscribers will also be categorized in one of four content categories. If a content provider is attempting to deliver content to a subscriber in a 'lower' category, the content download will fail and a specific error will be returned to the content provider, who will need to send a message to the subscriber alerting him/her that the content is not available.

The four content categories are :

Verizon content/subscriber categories

Category	Recommended Age Group
C7+	Age 7+
T13+	Age 13+
YA17+	Age 17+
Filter Off	Age 18+

The subscriber classification can be changed by parents by logging in to their Verizon account. The default subscriber classification is T13+. The content classification is set by the content provider and actively audited by Verizon to prevent abuse. The default content classification is T13+.

Timelines for implementation have not been communicated. While this potentially opens the door for content providers to offer adult content, Verizon has made it clear that only the first two content categories will be allowed for now. There is no firm date at this time for when content in the later categories will be allowed.

US Premium SMS Revenues

Telephia released the first ever study on Premium SMS in the US. Over the course of the first quarter of 2007, a total of 74 million premium SMS transactions were processed across all carriers, for a total retail value of $273 million.

A couple of interesting statistics:

• Mobile content downloads dominate in value (79% of total revenue). Average premium transaction value is $7.27
  
• Off-portal content downloads now account for 32% of all mobile content downloads.
• TV based voting and sweepstakes account for 47% of total volume, but that total is probably based on a few stand out hits like 'Deal or No Deal', who accounts for half of that volume. Average premium transaction value is $1.
  
• Based on Q1 results, we can now safely say that 2007 Premium SMS revenues will exceed $1 billion.

Detailed results are posted below.

Q1 2007 Premium SMS Volume and Retail Value

Category Type	Volume (000)	Volume Share (%)	Revenue	Revenue Share (%)
Mobile Content	29,544	40%	$214.9M	79%
Voting/Sweepstakes	34,716	47%	$35.4M	13%
Chat/Community	5,497	7%	$5.7M	2%
Other	4,208	6%	$17.4M	6%

Here are some thoughts about these numbers:

• The high transaction value associated with mobile content ($7.27) clearly indicates that the vast majority of all mobile content downloads is charged on a monthly subscription basis. If that is the case, roughly 10 million users are currently signed for monthly subscriptions, or about 4% of all mobile subscribers in the US.
• Furthermore, if we assume that binary content subscriptions (ringtones, wallpapers, games, etc.) typically cost $9.99 per month, where as pure text subscriptions (horoscopes, jokes, etc.) cost $4.99, it follows that 54% of all mobile content subscribers sign up for text alerts, and 46% sign up for ringtones.
• It is clear that most premium sweepstakes and voting contests run at a $0.99 price point.
• It is interesting to see that voting+content account for over 90% of all revenues. This means that other premium sms categories such as chat, dating, and micropayments haven't really taken off yet. This is hardly surprising given the limited support amongst carriers as well as the severe restrictions that some carriers are imposing on such programs.
  

Verizon and Reverse Auctions

Verizon Wireless now requires all premium billed reverse auctions to include some form of added value content (text alert, joke, trivia, etc.). This is due to the changing legal landscape causing reverse auctions to be considered as games of chance and no longer games of skill. Without the added value component, reverse auctions could be viewed as an illegal form of gambling in some states.

Although this provision specifically applies to reverse auctions (and not general sweepstakes), we do feel that the next step will probably be to extend it to premium billed sweepstakes. We encourage content providers to start modifying their premium sweepstakes and reverse auction campaigns accordingly.

Cingular Off Portal Purchasing Control (OPPC) System

Cingular announces important changes to the way its Subscription and Refund Management (SRM) system will work, mainly to improve Cingular's visibility over end-user subscription status to 3rd party content.

Under the new and revised SRM system, content providers no longer need to handle the double opt-in user interaction before starting a new subscription on Cingular's SRM platform. Instead Cingular will handle the double opt-in management through its Qpass billing platform.

Here's the old message flow:


And here's the new message flow:


The new system has the advantage that Cingular customer service reps will be able to handle consumer complaints more effectively and verify consumer claims about opt-in status to specific campaigns.

For Quios customers who use the Quios Permission Management System (QPMS) no changes will be needed. Quios will handle the revised requirements transparently to our customers.

The change-over is expected to take place by the end of Q3 2007.

T-Mobile and Games/Applications

T-Mobile announced today that all J2ME games and applications need to be certified by their independent certification partner, True North Service, before they will be approved by T-Mobile and made available to T-Mobile subscribers.

This new requirement doesn't change the previous requirement that all J2ME games and applications need to be part of T-Mobile's white list of approved applications.

The new independent certification step needs to be completed before submitting your short code campaign to T-Mobile for approval, hence further lengthening the approval process and time-to-market for your campaigns. Make sure to give yourself plenty of time (at least 10-12 weeks) to go through the entire T-Mobile approval process.

If you currently sell J2ME games on a T-Mobile approved short code, you need to contact True North within 30 days to start the re-certification process.

For True North Service contact details, contact us.