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Happy Birthday, SMS

SMS celebrated its 15th birthday in July this year, demonstrating just how remarkable the service is - still at the top of its game long after many younger mobile applications have died a death. SMS is often called the “accidental hero” of the mobile industry, but just what is its history? Steven Van Zanen, VP marketing for Intuitive Messaging at Acision - the company formerly known as LogicaCMG - gives us the low-down. (You can meet Steve and the Acision team at the Telco 2.0 event in October.)

As we all know, the Short Message Service (SMS) is a means of sending short messages to and from mobile phones. SMS was defined as part of the original GSM standard in 1985 as a means of sending service messages of up to 160 characters to and from GSM mobile handsets. Since then, support for the service has expanded to include alternative mobile standards such as CDMA networks, satellite and landline networks. At the time of inception, just what this messaging capability would be used for was not immediately clear - some were planning for telemetry, some thinking of voicemail or service alerts, but person to person messaging? That was never the plan.

Throughout the late ’80s and early ’90s as Western European GSM networks launched, they all included this messaging functionality, but almost without exception it was left dormant. Early mobile phones had a very basic user interface, and even if they included the client application for messaging it was not easily navigable.

The first SMS “text message” is reputed to have been sent in 1992 by a UK mobile network engineer to his colleagues, wishing them (in capital letters) MERRY CHRISTMAS. This message was sent from a PC to mobile phones, and it was not until early 1993 that the first handset to handset message was sent - by a Finnish engineering student within Nokia.

But by then, some European mobile operators had already spotted an opportunity; they were in the process of equipping themselves to be able to offer SMS as a commercial messaging service (albeit a niche one, as they thought at the time, and one that for a while they didn’t think to charge for). In 1992 Aldiscon and CMG, both later bought by Logica, and now Acision, secured contracts for development and deployment of the Short Message Service Centre (SMSC) intended for commercial use. Both SMSC’s were deployed in 1993 at BT Cellnet, now O2, and Telenor respectively.

Despite this early start, the first couple of years saw only slow uptake of the service, and it was not until 1999 that interoperability between the operators enabled users to send messages across networks. However its initial pricing (free!) helped SMS establish itself as a good alternative to the still-expensive mobile call, and as mobile phones found their way into the pockets of the youth market it became the obvious medium for their seemingly inexhaustible communication habits.

Over the years the technology has moved on considerably. SMSC infrastructure has evolved from a basic ‘SMSC box’ to a complete next-generation, IP-based SMS architecture, and both functionality and capacity have increased dramatically in line with the service popularity. In 1993, SMSC version 1.0 had a capacity of 10 messages per second. The performance was soon surpassed through ongoing innovation to improve capacity, reliability and accessibility. By 1999 the mobile industry saw the introduction of the first high performance SMSC, also launched by Acision, with what was then an incredible 50 fold capacity increase to 500 messages per second. Such speeds have now been greatly exceeded by today’s further 32 fold capacity increase achieved by the latest Acision IP SMSC: 16,000 messages per second on a single cabinet, with the ability to scale up to virtually unlimited performance.

The SMSC is now a part of a modular, IP based solution, where it is the engine for person-to-person messages as well as value added services and applications.

So what is left to achieve? Certainly SMS volumes are continuing to rise, in both established and emerging markets, but under pressure of competitive pricing, operators are also looking to evolve the humble text message. To quote Portio Research (February 2007): “SMS already has an installed user base of over two billion people, that’s one third of the human race […] if you want to create a service that needs a big audience to be a success, make it an SMS-base service”.

Such a high penetration service provides the perfect opportunity for operators to differentiate themselves, adding features familiar to users from other messaging mediums such as email. SMS also provides the perfect medium for mobile advertising campaigns with its unrivalled reach and personal connection to the user. Out of office, auto-forward and storage/back up capabilities are helping move SMS further into the lives of users and, due to its reliability, also into the business world for banking, tickets, charging.

SMS has reached greater heights than were ever intended for the 160 characters, but watch this space. With North America finally getting addicted to SMS, Europe’s operators are preparing to move ahead again, planning new revenue streams from SMS through mobile advertising and easy integration with online messaging. Happy birthday SMS, and may there be many more to come!

[Ed - Steve will be preparing a special stimulus presentation on new approaches to leveraging SMS for mobile advertising at the Telco 2.0 ‘Digital Advertising & Marketing Summit’ on the 16th October.]

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I'd like to be reminded of how the transition from a 'free' service to a paid-for service happened. Operators seem to have got scared of launching free services since then. The internet players seem now to have mastered the 'freemium' approach and the mobile operators lagging behind in market introduction of new products...

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