In this series we will expose the reality of what’s happening in A2P SMS. We’ll review how the current situation can and will be solved, through mitigations the industry must adopt.

This series is based on extensive research through 2024, it is not a complete exposé. However, the main mechanisms and mitigations are covered. My ‘agenda’ is to expose the truth of what is happening because industry bodies are covering up what is happening.

Premium SMS (2000-2010)

Short messages were used to deliver premium rate content services. Content such as news alerts, financial information, ringtones, games, and adult content / services. Between 2006-2008 mobile content was already in decline.  See source https://www.slideshare.net/slideshow/procontentru-andrew-bud-mblox-mef-presentation-at-vas-v-conference-presentation/.

See slide below from MEF; Mobile Entertainment Forum, now called Mobile Ecosystem Forum, or as I refer to them as the Mushroom Ecology Farm as their chairman instructs members to ignore my work, hence keeping themselves in the dark and fed BS.

A large AIT (Artificially Inflated Traffic) generator is one of the MEF’s sponsors. When I published some commentary on one of the generator’s posts about AIT, I received several comments from MEF members frustrated at the audacity of the AIT generator’s AIT posts.

MEF knows what the AIT generator does, yet takes his money. Just like they know about Bill Peters’ treatment. Bill’s arbitration is still ongoing, he was fired in 2022, and I think arbitration is now delayed until 2025. Arbitration is supposed to be fast, in practice it is not. If you’re employed in the US, I recommend you remove the arbitration clause from your employment contract, it’s not in your favor. Learn much more here.

Anyway back to the premium SMS story.

In 1998, the first premium-rate media content delivered via SMS was the world’s first paid downloadable ringing tones, as commercially launched by Saunalahti (later called the Jippii portal and closed down in 2010). Saunalahti was founded in 1996 when three mid-sized internet access providers merged.

Initially, only Nokia branded phones could use the portal. By 2002 the ringtone business globally had exceeded $1 billion of service revenues, and nearly US$5 billion by 2008, before its terminal decline. 

The service fee carriers charged for the premium SMS could be as high as 80% of the content fee (including carrier portal placement as that’s how content was discovered back then), 50% was more common.

Such high fees compared poorly to credit and debit cards with fees of a few % of the purchase price. The content industry moved away from carrier billing, and the Apple and Android ecosystems built out the gift card infrastructure, in addition to credit/debit card payments, to achieve global mass market adoption.

Premium SMS Fraud and Mitigation

A factor that led to the decline of premium SMS was fraud:

• Recurring monthly / biweekly subscription charges made, when the transaction was only a one-off purchase; and
• Inflated charges, that is the price quoted was before all the carriers’ fees, so the final charge on the bill was much higher, almost twice.

The carriers ended up dealing with many frustrated customers, so they added processes requiring the content providers to include their customer service number. Unfortunately the chances of that number being answered was low. Carriers also added features like “Purchase Blocker” which is still available today from AT&T.

There also emerged mobile payment providers that ‘managed’ the mobile content payments for carriers. But instead migrated mobile customers away from mobile payments onto credit/debit cards. Carriers were being fleeced from all sides.

The reputable content industry moved away from premium SMS, the lack of control and sky high fees made it a mess, plus the Apple and Android ecosystems built out their gift card infrastructure. Today carrier billing exists in a few countries where personal banking infrastructure remains immature.

I mention the premium SMS experience as it highlights two important aspects of A2P SMS history:

• A 30 year history in lack of coordination / control from the industry, hence bad actors could make a buck and move on once the problem became significant enough to warrant carrier action; and
• Fees out of step with more widely used mechanisms, e.g credit / debit / gift cards.

This all led to premium SMS’s demise as a content channel.

We see today price rises and lack of control / coordination in A2P SMS. Is the premium SMS story about to be repeated? The Camara project (Network APIs) is certainly repeating the OneAPI story. This does seem to be a recurring theme in mobile telecoms.

I finish on a quote on why this review of A2P SMS history is important.

Those who cannot remember the past are condemned to repeat it.

George Santayana, philosopher

In Part 3 we’ll get into SIM Farms, AA.19 and AA.60/63 agreements. Here’s the link to Truth in A2P SMS, Part 1 of 5 in the series.

Articles in this series

Truth in A2P SMS, Part 1 of 5, In the Beginning & Foreign SMSCs. https://blog.tadsummit.com/2024/07/29/truth-in-a2p-sms-part-1/

Truth in A2P SMS, Part 2 of 5, Premium SMS. https://blog.tadsummit.com/2024/08/01/truth-in-a2p-sms-part-2-of-5/

Truth in A2P SMS, Part 3 of 5, First phase of SIM farms & Non-interworking Agreements and Gray Routes. https://blog.tadsummit.com/2024/08/05/truth-in-a2p-sms-part-3/

Truth in A2P SMS, Part 4 of 5. SIM Farms 2.0, AIT, Exclusivity, Control, A2P Revenue Assurance. https://blog.tadsummit.com/2024/08/07/truth-in-a2p-sms-4/

Truth in A2P SMS, Part 5 of 5. Mitigations: SMS Governance / Certification and Published Rates, RCS Fraud, Current Situation. https://blog.tadsummit.com/2024/08/09/truth-in-a2p-sms-3/