Securing the Future for SMS

The phenomenal and unexpected success of Short Message Services (SMS) reshaped the fortunes of the global mobile communications industry, and this market boom is not set to stop any time soon. Far from it, in fact, as several leading industry analysts agree on predictions that the market will grow from strength to strength through to at least 2007.

SMS traffic is set to grow year on year, with a 50 per cent increase forecast over the next 12 months alone. Revenue predictions – driven upwards by the rise of new premium SMS and interactive SMS services – are equally optimistic. Linking text messaging to entertainment and TV through activities such as interactive voting, quizzes, competitions, shopping and auctions is quickly gaining popularity with consumers. Operators are reaping the rewards to the extent that as much as 40 per cent of revenues can be attributed to SMS.

Today, finding an operator anywhere in the world that does not offer SMS services would prove to be quite a challenge. It has become a commodity offering, albeit one where demand is still growing, which makes operators reluctant to continue investing in it. Instead they are looking for ways to drive down the cost of SMS delivery so that investment can be routed towards developing new and innovative services that will put them ahead of the game. Acknowledging the need to buy infrastructure to handle the rising SMS traffic, however, operators are looking for solutions at prices that are in line with the maturing status of the technology.

Cutting costs without cutting corners

In their enthusiasm to lower capital expenditure (CAPEX) and operational expenditure (OPEX) across the network infrastructure, operators are looking for easy hardware implementation and short-run cost savings for immediate gains. As a result, w hilst factors such as performance, scalability and quality of service remain important to mobile operators, cost savings and ease of integration of new and existing solutions are the watch-words for many.

This shift in focus has created a new business opportunity for providers of alternative solutions for handling SMS traffic. However, operators should be wary of solution vendors that have selected a single feature of the end-to-end messaging infrastructure and lowered the overall price by radically slashing the cost – and therefore capability – of this individual feature.

The store-and-forward mechanism of the Short Message Service Centre (SMSC) is particularly at risk of elimination. With four out of five messages successfully delivered on the first attempt, the value of a store-and-forward capability is called into question by some vendors. Many seemingly low-cost solutions focus on the First Delivery Attempt (FDA), handing the 20 per cent of failed messages to a separate store-and-forward system. Whilst this approach cuts costs on the FDA, it can have a serious impact on overall service quality and involve greater investment elsewhere over a longer period. If you consider that in the UK alone, more than two billion text messages are sent every month, jeopardising the successful and timely delivery of 400,000 of these will result in a huge number of dissatisfied customers.

Store-and-forward is a key mechanism in the SMS infrastructure. In practice, relying on the FDA for handling the bulk of SMS traffic only works if there is a high degree of spare capacity in the infrastructure and the operator is able to guarantee a continuously high success rate on delivery. However, there are many different reasons why a message may not be delivered at first attempt, whether the recipient has no network coverage, has switched off their mobile phone or has no remaining SMS capacity in its memory. For example, traffic peaks around music festivals, Christmas, New Year and major sporting events can result in up to 80 per cent more messages being sent on any given day. This inevitably tests the operator’s network and messaging infrastructure to the max and often cause problems, despite careful capacity planning. As the number of delivery errors increases, congestion builds and pressure on the network grows.

With a separate store-and-forward mechanism, there is no ‘gearbox’ co-ordination between the FDA and the retry system so that both act independently. On message failure, the infrastructure will repeat efforts to locate the recipient, continue attempts to resend the message and forward a delivery error report each time to the separate store-and-forward platform. The resulting burden on the signalling load rises in proportion to the number of failed attempts, which calls for additional storage capacity and eventually impacts quality of service to the customer. Alternatively, without any provision for store-and-forward, if the FDA fails then the message is lost.

To make the most of the SMS market opportunity, operators need to explore strategies that will make service delivery as cost effective, reliable and efficient as possible…without cutting vital corners.

Taking a more holistic view of their SMS infrastructure, the real challenge is not to save costs on a single function but to reduce CAPEX and OPEX across the entire messaging system, without losing quality of service. With 30 per cent of mobile phone users looking for better quality of service from their networks, and a third of these sufficiently dissatisfied to walk away from their current service provider without further thought, operators must clearly ensure that they keep service quality at the top of their business agenda (Source: Survey conducted by LogicaCMG of mobile phone subscriber opinions. The survey was conducted online in March/April 2004, canvassing the opinions of 1,036 mobile phone users in the UK.)

Achieving more with less

To get the best of both worlds, operators need to look at solutions that integrate the FDA with a robust and scalable store-and-forward retry mechanism, minimise total cost of ownership and protect current investments.

Facing double-digit messaging traffic increases during peak events year after year and a booming market for some time to come, operators understandably want to avoid taking any risks with their SMS infrastructure. However, they are balancing this with a reluctance to invest heavily in this commodity service. Operators need a messaging solution that brings together best-of-breed technologies for both the FDA and the store-and-forward mechanism in a single integrated solution. With direct delivery and store-and-forward on a single platform, operators can deploy new systems offering full functionality straight away or build into existing infrastructures to increase capacity. After all, few would demolish their house just to add more space to a room! This kind of platform would provide operators with immediate OPEX savings across the system and a return on investment straight away, without compromising service.

Through integration, operators are able to synchronise the FDA with any required subsequent retries on message delivery. This not only achieves lower cross-over of effort between the two systems, but also reduces the likelihood of a message being delivered twice – or not at all – and also cuts the probability of a customer being billed more than once. In the competitive mobile sector, where customer service is key and subscribers do not tend be loyal in their choice of operator, these quality of service issues can have a huge impact on user perception, and hence operator revenues. Gaining all of the additional capability and capacity with minimum investment through a single FDA and store-and-forward platform, operators can reduce costs without cutting corners.