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.
Tuesday, June 12, 2007
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.
Friday, June 08, 2007
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:
Let's hope U.S. carriers get the 'message'.
According to John Delaney, principal analyst in Ovum's Consumer Group, there are five reasons for the success of SMS:
- Simplicity: everyone can use it.
- Ubiquity: everyone has it.
- Awareness: everyone knows about it.
- Critical Mass: everyone can receive SMS and knows how to read it.
- Reliability: SMS messages don't get lost all that often.
Let's hope U.S. carriers get the 'message'.
Tuesday, June 05, 2007
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 :
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.
The four content categories are :
| 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.
Monday, June 04, 2007
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:
Here are some thoughts about these numbers:
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.
| 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.
Friday, June 01, 2007
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.
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.
Tuesday, May 29, 2007
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.
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.
Thursday, May 10, 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.
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.
Monday, May 07, 2007
Sprint Premium SMS Message Flow (Updated)
Sprint is changing the way gateway providers interact with Sprint's message delivery and billing systems. Whereas content providers just deliver the proper premium sms message to gateway providers like Quios, we work behind the scenes to (i) deliver the content to the cell phone user; (ii) initiate a billing transaction with Sprint's billing system.
Previously, we were first initiating a billing transaction before attempting to deliver the content. Sprint is now requiring us to reverse this message flow, and first attempt to deliver the content, before initiating a billing transaction.
The message flow change will take effect on Wed. May 9th between 2am and 4am PT.
Customers do not need to change anything on their side. As is the case with the other carriers, Quios will perform retries on all failed billing transactions to optimize the success billing ratio.
We don't expect this change to have any material effect on success billing ratios. It will reduce the number of complaints from consumers about being charged for content that was never delivered. On the other hand, this new system could lead to content being delivered successfully without being charged (ie. message delivery succeeds but billing fails).
UPDATE: Sprint has warned aggregators to expect a reduction in success billing ratios of up to 25-30%, part of which is due to the rationalization of delinquent subscribers on their network. However, we have no further visibility on how this will affect individual content providers.
Previously, we were first initiating a billing transaction before attempting to deliver the content. Sprint is now requiring us to reverse this message flow, and first attempt to deliver the content, before initiating a billing transaction.
The message flow change will take effect on Wed. May 9th between 2am and 4am PT.
Customers do not need to change anything on their side. As is the case with the other carriers, Quios will perform retries on all failed billing transactions to optimize the success billing ratio.
We don't expect this change to have any material effect on success billing ratios. It will reduce the number of complaints from consumers about being charged for content that was never delivered. On the other hand, this new system could lead to content being delivered successfully without being charged (ie. message delivery succeeds but billing fails).
UPDATE: Sprint has warned aggregators to expect a reduction in success billing ratios of up to 25-30%, part of which is due to the rationalization of delinquent subscribers on their network. However, we have no further visibility on how this will affect individual content providers.
Monday, April 23, 2007
Goodbye Dobson, Hello Cellular One
Dobson has completed its rebranding from Dobson/Cellular One to Cellular One. Please update your marketing materials accordingly. You may use below logos (small or large) provided you follow the Dobson branding guidelines as documented in the Quios White Paper.
New Minimum Rates from Alltel
Alltel is imposing a new minimum rate of $0.50 on all premium billed campaigns. Existing campaigns below this minimum may continue, but new campaigns must adhere to the new policy.
The other carriers with minima are AT&T Mobility, who requires a minimum of $0.25, and Sprint, who requires a minimum of $0.15.
The other carriers with minima are AT&T Mobility, who requires a minimum of $0.25, and Sprint, who requires a minimum of $0.15.
Tuesday, April 17, 2007
Verizon Pricing Changes
Verizon has announced following price policy changes. All affected campaigns need to start adhering to this new policy by APRIL 30, 2007. We will approach Quios customers who have affected campaigns individually to assist them in the migration.
1. Weekly billing is no longer allowed. You can continue to use daily or monthly billing.
2. Chat pricing is capped at $0.99 per message.
3. Monthly subscription campaigns are capped at $20 per month.
1. Weekly billing is no longer allowed. You can continue to use daily or monthly billing.
2. Chat pricing is capped at $0.99 per message.
3. Monthly subscription campaigns are capped at $20 per month.
Thursday, April 12, 2007
Recycled Numbers Lawsuits
Quios has learned that several law suits have been initiated against wireless carriers regarding deactivated numbers. The complaints in these suits have to do with recipients allegedly being billed for services and content based upon authorizations received by the PREVIOUS owner of that phone number.
As detailed in a previous post (Mo. June 19, 2006) deactivated numbers are typically recycled by carriers after 3 months. Carriers provide us with lists of deactivated numbers. We provide those lists to our customers through an ftp site. Please contact us for details.
It is extremely important for all content providers to diligently take the proper actions after receiving the new disconnect list. Failure to do so may lead to consumer complaints, shut down of the short code by the carrier, or even legal action.
As detailed in a previous post (Mo. June 19, 2006) deactivated numbers are typically recycled by carriers after 3 months. Carriers provide us with lists of deactivated numbers. We provide those lists to our customers through an ftp site. Please contact us for details.
It is extremely important for all content providers to diligently take the proper actions after receiving the new disconnect list. Failure to do so may lead to consumer complaints, shut down of the short code by the carrier, or even legal action.
Wednesday, March 21, 2007
Alltel increases spending limits, adds support for pre-paid
As of March 7, 2007 Alltel has increased the monthly spending limit for premium services from $35 to $75. This spending limit is applied by Alltel on a PER USER basis and covers all premium SMS usage by that user in a given month. Alltel is enforcing the limit. Content providers do not need to make any changes.
At the same time, Alltel announces support for prepaid phones. The subscriber must have sufficient funds in his account for a premium transaction to succeed.
We believe that both measures will help to increase the overall SBR (Success Billing Ratio) of Alltel's network. Quios' average SBR on Alltel for 2006 was a low 45.5%, compared to an average SBR across all US carriers of 87.9%.
At the same time, Alltel announces support for prepaid phones. The subscriber must have sufficient funds in his account for a premium transaction to succeed.
We believe that both measures will help to increase the overall SBR (Success Billing Ratio) of Alltel's network. Quios' average SBR on Alltel for 2006 was a low 45.5%, compared to an average SBR across all US carriers of 87.9%.
Friday, March 09, 2007
T-Mobile reduces impact of recent changes
T-Mobile announces today that it has made changes to its campaign provisioning fee structure as well as its refund driven outpayment penalty structure. The changes are implemented retroactively from Feb 1st, 2007 onwards.
1. The one-time campaign provisioning fee is reduced from $1,000 to $500.
2. The new outpayment penalty structure now provides an incentive in addition to penalizing customers for excessive refunds. If the refund ratio is 5% or lower, T-Mobile will increase the outpayment to customers by 2%. However, the penalties for having high refunds have increased. The new structure is detailed below:
We applaud the reduction of the campaign provisioning fee. We feel it's important to keep the barriers to entry as low as possible since that will result in more campaigns, more services, and more innovation.
While it's positive that the new refund related structure now has an incentive in addition to a penalty, we still feel that these measures are ill conceived because they penalize all content providers of a certain aggregator in the same way regardless of the specific refund % of any one specific content provider. Secondly, content providers have no direct control over carrier refund policies. We would think that the typical carrier margins of 35-40% on premium SMS outpayments would be sufficient to deal with refund problems. And if not, carriers always have the option to cancel a certain campaign if refunds prove to be too high or costly.
1. The one-time campaign provisioning fee is reduced from $1,000 to $500.
2. The new outpayment penalty structure now provides an incentive in addition to penalizing customers for excessive refunds. If the refund ratio is 5% or lower, T-Mobile will increase the outpayment to customers by 2%. However, the penalties for having high refunds have increased. The new structure is detailed below:
| Refund Rate | T-Mobile Revenue Share Change (%) |
|---|---|
| 0%-5% | +2% |
| 5%-7.5% | 0% |
| 7.6%-10.9% | -4.6% |
| 11%-14.9% | -18.25% |
| 15% or greater | -100% |
We applaud the reduction of the campaign provisioning fee. We feel it's important to keep the barriers to entry as low as possible since that will result in more campaigns, more services, and more innovation.
While it's positive that the new refund related structure now has an incentive in addition to a penalty, we still feel that these measures are ill conceived because they penalize all content providers of a certain aggregator in the same way regardless of the specific refund % of any one specific content provider. Secondly, content providers have no direct control over carrier refund policies. We would think that the typical carrier margins of 35-40% on premium SMS outpayments would be sufficient to deal with refund problems. And if not, carriers always have the option to cancel a certain campaign if refunds prove to be too high or costly.
Wednesday, January 31, 2007
US SMS Penetration by Age Group
Forrester Research released a study on text messaging usage by age group. They estimate that consumers between ages 12 and 21 are more than twice as likely as the average adult mobile user to send messages or browse the Internet on their mobile phone.
The study also shows that among young people, text messaging is pretty much universally adopted.
Here are the numbers:
Note: Based on US Households that owned a mobile phone in December 2006
The study also shows that among young people, text messaging is pretty much universally adopted.
Here are the numbers:
| Age Group | Active SMS User % |
|---|---|
| 18-24 | 76% |
| 25-34 | 58% |
| 35-44 | 43% |
| 45-54 | 33% |
| 55-64 | 22% |
| 65 and over | 19% |
Note: Based on US Households that owned a mobile phone in December 2006
Thursday, January 11, 2007
T-Mobile Changes
[Updated Jan. 19, 2007]
Today Quios is informing its customers of rate changes that will be applicable for short code campaigns that run on T-Mobile's network. These changes are implemented with immediate effect :
1. Introduction of one-time T-Mobile campaign setup fee of $1,000. Note that T-Mobile requires that every campaign running on a short code be approved separately. Each one of these campaigns will incur a set up fee of $1,000.
2. Quios' revenue share payout on T-Mobile traffic will be reduced by the percentage reflected in the table below based on the AGGREGATE T-MOBILE REFUND RATE experienced by ALL Quios customers in a given month. Note that, if the refund rate is 15% or greater, there will be no outpayment at all for that month. The refund rate is calculated by dividing the total amount of refunds issued by T-Mobile to End-Users for premium programs offered by all the aggregator's customers, by the total dollar amount of premiums billed by those customers for the relevant month. For example, if Quios experiences an aggregate refund rate of 8% based on the total refunds made by T-Mobile attributable to all Quios customers, outpayments to all Quios customers will be reduced by 2.5% in the applicable month.
Remember that short code campaigns are submitted on a per carrier basis. Hence we do offer the possibility to not submit your campaigns to T-Mobile if you feel that above measures impact the profitability of your business model.
For more information about these measures and what they mean for your business, contact us.
Today Quios is informing its customers of rate changes that will be applicable for short code campaigns that run on T-Mobile's network. These changes are implemented with immediate effect :
1. Introduction of one-time T-Mobile campaign setup fee of $1,000. Note that T-Mobile requires that every campaign running on a short code be approved separately. Each one of these campaigns will incur a set up fee of $1,000.
2. Quios' revenue share payout on T-Mobile traffic will be reduced by the percentage reflected in the table below based on the AGGREGATE T-MOBILE REFUND RATE experienced by ALL Quios customers in a given month. Note that, if the refund rate is 15% or greater, there will be no outpayment at all for that month. The refund rate is calculated by dividing the total amount of refunds issued by T-Mobile to End-Users for premium programs offered by all the aggregator's customers, by the total dollar amount of premiums billed by those customers for the relevant month. For example, if Quios experiences an aggregate refund rate of 8% based on the total refunds made by T-Mobile attributable to all Quios customers, outpayments to all Quios customers will be reduced by 2.5% in the applicable month.
| Refund Rate | T-Mobile Revenue Share Minimum Reduction (%) |
|---|---|
| 7.6%-10.9% | 2.5% |
| 11%-14.9% | 10.00% |
| 15% or greater | 100% |
Remember that short code campaigns are submitted on a per carrier basis. Hence we do offer the possibility to not submit your campaigns to T-Mobile if you feel that above measures impact the profitability of your business model.
For more information about these measures and what they mean for your business, contact us.
Monday, November 27, 2006
Sprint standards and penalties
Sprint has elaborated a number of standards that content providers must comply with or face penalties. The standards go beyond the guidelines released by the MMA today and are described in full detail below:
Sprint may enforce the following penalties if you do not meet the standards outlined above:
- Compliance with the Consumer Best Practices Guidelines, as set forth by the Mobile Marketing Assocation. The guide can be downloaded here
- Compliance with any rules or requirements set forth by Sprint from time to time regarding campaign guidelines. Check the Quios white paper for list of rules and requirements.
- De-activated phone numbers must be removed from all your services within 24 hour of receipt.
- Messages destined to invalid or blocked Sprint phone numbers shall comprise no more than 25% of all messages delivered per month.
- Billable events destined to invalid or blocked Sprint phone numbers shall comprise no more than 25% of all billable events delivered per month.
Sprint may enforce the following penalties if you do not meet the standards outlined above:
- Sprint, in its sole discretion, may terminate a campaign that is determined to be in non-compliance.
- Sprint may recover any 'reasonable and documented out-of-pocket costs' to a maximum amount for any single breach or series of related breaches equal to the lesser of (a) 20% of the amount owed to the content provider in that month or (b) USD $30,000 for the initial breach, USD $50,000 in the event of a second breach of the same Sprint standard, or USD $100,000, in the event of a third breach of the same Sprint standard. These amounts may be set off from any fees or revenue share owed to you.
MMA Releases update to Consumer Best Practices Guideline
The Mobile Marketing Association (MMA) today released an update to the Consumer Best Practices Guide. The guide provides content providers with specific guidelines on how to set up and manage mobile campaigns.
Here are the key changes:
Here are the key changes:
- Use of 'free' terminology in advertising and promotion
- Marketing to children
- Processing of carrier deactivation files and management of spending cap limits
- Viral marketing
Thursday, July 13, 2006
Cingular and Credit Card Billing
Cingular has released a new edition of their 'customer experience' policy document. The biggest change pertains to alternative (ie. non-premium SMS) forms of payment. With immediate effect, Cingular will no longer accept short code campaigns that use non-premium SMS based forms of payment (credit card, Paypal, etc.).
Cingular used to allow non-premium SMS forms of payment as long as premium SMS was promoted as the 'primary' form of payment.
New campaigns that include alternative payment methods will be rejected. All existing campaigns need to comply ASAP with the new policy to avoid any danger of short code termination.
Cingular used to allow non-premium SMS forms of payment as long as premium SMS was promoted as the 'primary' form of payment.
New campaigns that include alternative payment methods will be rejected. All existing campaigns need to comply ASAP with the new policy to avoid any danger of short code termination.
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