July 2010

Author: Mitali Bhojwani
Published: July 2010
Pages: 24

Pricing:

Single-user License: $ 295 USD
Company-wide License: $ 995 USD
Team License (Up to 5 Users): $ 685 USD

Note: Purchasers of this report also receive a copy of: Mobile Messaging Business and Technology

Keywords: Short Message Service, SMS, SMSC, Short Message Service Center, SMS Aggregator

Overview:

The wireless penetration has reached 91% in the US in 2009. With billions of SMS messages sent every month in US alone, it has become the most effective and cost efficient mechanism to communicate and market. By surrounding the user with opportunities to connect, SMS can lead to multiple interactions over SMS or other mobile channels. Including SMS as part of application marketing is critical for user acquisition, retention and monetization.

This report evaluates the SMS ecosystem and value chain including components invested in the potential of SMS and supporting technologies. It provides a case study of companies who have benefitted from this service in infotainment services like music and games.

Key Questions Answered:

• Why is SMS important and relevant in the industry today?

• What is the architecture of a SMS system?

• What is SMS ecosystem and value chain? Individual analysis - who are the players and who is doing what?

• What are Short codes?

• Future market prospects

• Company products and services using SMS

Audience:

• Anyone seeking a better understanding of the Short Messaging Service (SMS) ecosystem and value chain
• Vendors and service providers offering SMS and SMS related products and services
• Investors, consultants, and analysists

Table of Contents:

1. General............................................................................................................................8

1.1 The story behind SMS success............................................................................................9

1.2 Types of SMS.................................................................................................................10

1.3 SMS Applications............................................................................................................11

2. Technical........................................................................................................................13

2.1 External Short Messaging entities.......................................................................................13

2.2 SMSC...........................................................................................................................13

2.3 HLR/VLR.......................................................................................................................14

2.4 MSC.............................................................................................................................14

2.5 BSC.............................................................................................................................14

2.6 BTS.............................................................................................................................14

2.7 Mobile device.................................................................................................................14

3. Market overview..............................................................................................................15

3.1 Content provider..............................................................................................................16

3.1.1 Short codes..................................................................................................................16

3.2 Application developers......................................................................................................16

3.3 Aggregators....................................................................................................................17

3.4 Marketing agent...............................................................................................................17

3.5 Value Chain Analysis........................................................................................................17

3.5 Future market forecasts....................................................................................................18

4. Case study.....................................................................................................................20

4.1 Music............................................................................................................................20

4.2 Gaming.........................................................................................................................20

4.3 Greetings.......................................................................................................................21

4.4 Health...........................................................................................................................22

4.5 Language......................................................................................................................23

4.6 SMS in satellite phone networks........................................................................................23

5. SWOT.............................................................................................................................24

List of Figures

Figure 1: Wireless Penetration in US

Figure 2: SMS message volume globally

Figure 3: SMS system architecture

Figure 4: SMS ecosystem

Figure 5: SMS Value chain analysis

Figure 6: Role of an Aggregator

Figure 7: Value chain analysis of P2P messaging

Figure 8: Value chain analysis of A2P messaging

Figure 9: PlayNow arena

Figure 10: Mafia Wars SMS service

Figure 11: Reaching the Hispanic market with SMS