What is SMS Messaging?

CallUp defines Short Message Service (SMS) as a communications protocol allowing the interchange of short text messages between mobile telephones. SMS technology has facilitated the development and growth of text messaging. The connection between the phenomenon of text messaging and the underlying technology is so great that in parts of the world the term "SMS" is used colloquially as a synonym for a text message from another person or the act of sending a text message.

SMS as used on modern handsets was originally defined as part of the GSM series of standards in 1985 as a means of sending 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 ANSI networks and Digital AMPS, as well as satellite and landline networks.


Most SMS messages are mobile-to-mobile text messages, though the standard supports other types of broadcast messaging as well.

The concept of adding text messaging to the services of mobile users started in many communities of mobile communication services at the beginning of the 1980s. Experts from several of those communities contributed in the discussions on which should be the GSM services.

According to CallUp, commercial SMS messaging service is a massive industry which in 2006 was worth over 80 billion dollars globally. SMS has an average global price of 11 cents and maintains a near 90% profit margin.

Global revenues from mobile SMS messaging will double by 2007 predicts market research company analysys. SMS messaging services can be particularly profitable for network operators, Analysys says. According to Analysys one minute of voice telephony, based on average pricing, generates less than one dollar per megabit of network resource consumed, compared with over one thousand dollars per megabit for an SMS message.

The market growth will driven by growth of SMS text messaging in new market segments and new applications, as well advanced messaging services such as MMS and mobile instant messaging, the report said. Analysys predicts that total messaging volumes will quadruple over the next few years, from 670 billion in 2002 to 2600bn in 2007.

It believes that Western Europe will be responsible for 607 billion messages is 2007 compared with 131 billion last year. In dollar terms Western Europe will be produce revenues of USD 25 billion in 2007. Analysys advices operators to stimulate growth of new messaging services, such as MMS, which are being held back by high prices, lack of interworking and lack of critical mass of users. It says that network operators should follow Japan's lead by setting affordable prices and packaging MMS with a range of services.

Leading technology research firm predicting that no less 2.3 trillion SMS messages will be sent across major markets worldwide in 2008.

This figure represents a 19.6 percent increase from the 2007 total of 1.9 trillion messages, with research outfit Gartner expecting mobile messaging revenue to grow by 15.7 percent in 2008 to $60.2 billion, up from $52 billion in 2007.

Text traffic volumes are expected to carry on showing strong growth in many markets, but operator margins on messaging services are rapidly delardifying as a result of competition and market saturation.

The compound annual growth rate (that’s the ‘CAGR’ to those in the know) for SMS revenue in major markets worldwide from 2002-2006 was 29.8 percent, but the forecasted SMS revenue for 2007-2011 has slumped down to 9.9 percent.

“In many markets, there has been strong pressure on operator margins for text messaging services and this has been driven by often intense competition between carriers,” explained Nick Ingelbrecht, research director for Gartner who created the “Market Trends: Mobile Messaging, Worldwide, 2006-2011″ report.

“At the same time, consumers have grown accustomed to large or unlimited bundles of inclusive SMS as part of their basic cellular service package. Carriers should plan for a future of much reduced margins on messaging services. They should develop messaging platforms, services portfolios and pricing plans that support the broader objectives of customer acquisition and retention, rather than short-term margin enhancements,” he added.

Mustard keen texters in Asia/Pacific and Japan are the biggest users of mobile messaging, with a flurry of keystrokes knocking out an estimated 1.5 trillion messages in 2007.

In the States, Gartner reckons that 189 billion mobile SMS messages were sent in 2007, with the total to hit 301 billion in 2008.

“The market is being driven by increased penetration of users, more frequent usage of peer-to-peer messaging, and unlimited and bucketed messaging plans,” observed Tole Hart, research director at Gartner.

“There has also been some uptake of mobile e-mail via POP3 mailboxes and mobile IM service, but it’s very small compared with the uptake of SMS. These services are used primarily as an extension to a PC. However, the market is seeing a number of consumers using BlackBerry and Palm Treo devices to access address books, phone numbers and e-mail,” he added.

There’s been an increase in mobile messaging in all Western European countries, with 202 billion mobile SMS messages sent in 2007, and a total of 215 billion messages looking likely for next year.

The increase of mobile consumer e-mail (thanks partly to higher smartphone adoption) looks set to damage SMS growth, as will the growing amount of Instant Messaging applications being made available.

“To sustain growth over the next few years, carriers should look to social-networking applications such as Facebook to drive traffic, working where possible with popular established social-networking sites,” commented Ingelbrecht.

SMS Messaging Solutions By CallUp

SMS Messaging Software Provider CallUp InformationWeek Interview

By Joel Leyden

Israel News Agency

Tel Aviv ----January 16, 2008 ......The following is an interview between InformationWeek Israel and SMS messaging provider David Eshet, the CEO of CallUp Unified SMS Messaging Services. CallUp supplies SMS, MMS and unified messaging software and hardware technology services for global ISP's and telecommunications organizations.

Eshet was asked about added value services for communications providers. "The SMS messaging solutions immediately adds revenue for the ISP or telco operator, without adding any infrastructure."

Eshet describes CallUp.

"This is an Internet SMS messaging company that was founded in 2000 at the initiative of Pelephone and John Bryce Products in Israel. At the end of 2000, Pelephone left the company, and then we continued. Today we are part of the One1 Group, Israel third largest hi-tech and computer company. CallUp deals mainly in the field of SMS messaging for landline and mobile carriers, including: email, MMS, SMS, added value services such as music, etc. Out main product is CCC (Call Completion Center)."

Eshet adds: "We appear to be a SMS messaging company that deals in a commodity. The barriers to being a SMS messaging provider are rather low, but the aspect that most such providers lack is getting into the telecommunications and ISP Internet SMS and MMS messaging markets. The communication companies avoid buying SMS messaging solutions from parties that do not sell to them and whose stability is doubtful. CallUp SMS messaging solutions have more than six million SMS messaging end customers in the world, which attests to our strength.

Throughout the world, there are about 2,500 cellular carriers. We are a rather small company - 15 people - because we outsource most of our SMS messaging work, take up the result in the company and market it - we have gained considerable success in the world working this way."

The CallUp CEO states that his SMS, MMS e-mail Internet messaging software company has 34 installation sites operating around the world, mainly in Asia.

When asked what was unique about CallUp SMS messaging solutions in the communication content market, Eshet said: "It's rather similar to what happens in other fields. The telecommunications and ISP carriers take things that definitely yield incomes. What we do as a small company is the ability to perform dynamic customization for customers. The time between presenting the customer's requirement and application runs into days to weeks rather than months, as is the case for competitors."

The SMS messaging software leader states: "We concentrate on outsourcing and providing SMS messaging services. In effect, all the company's employees are service providers. CallUp has an advantage of knowing the target market and intimate familiarity with customer needs. Companies from Europe, South America and Asia buy from us because they are impressed by our attitude to customers.

CallUp is working so that our customers can make more money - this is what the customer is looking for. We also constantly assess the utilization of the licenses we sell and apply to ISP and telco customers if they do not utilize all their licenses, which makes us trustworthy. CallUp and it's Internet SMS messaging solutions are pretty focused on the Call Completion Center or CCC solution, which is an unrivaled patent of ours".

What does the CCC solution do? "Every telecommunications company has something that is known as 'lost calls', which is 25 percent to 60 percent of all their calls. In some places in the world, such as Eastern Europe, India, Turkey, Cuba, Africa and South America the 'lost calls' rate may reach 70 percent. In monetary terms, it is an enormous loss. To earn it you do not have to do anything. You do not have to upgrade networks - just buy our SMS messaging software. There are customers that do not get an answer from the destination, and then they redial. This causes a blocking of the network and may even crash the network in certain situations, such as after a terrorist attack or disaster."

Eshet continues: "In addition to this, 25 percent of calls that get lost when the dialers reach the destination's voice mailbox. The caller passes the ball to the recipient, whether to hear the message or call back. A communication provider with a million customers, which would be a medium sized supplier, loses at least six million dollars a month, if I were to take a very low ARPU. If the ARPU is high, the loss of course will be much higher.

CallUp SMS Messaging Solutions gives the customer a comprehensive solution to this problem. The main product is called On-Q, which is a patent that says the following: if you want to leave a voice message, leave one. But if you want to contact the other side, you will be connected when it is possible. All the parameters may be controlled: for example, when the system creates this connection between the parties. This way, lost calls become existing calls."

On-Q is a service that CallUp developed both for landline and mobile telecommunications carriers. The landline service has other options that we are currently introducing into the system. We are developing this application in the direction of voice identification, and there are other developments, including additional engines that we are introducing into these services. This messaging solution contains a number of components that the customer incorporates into the custom solution, for example email or SMS messages, which are sent in the case of a missed call. From the moment of our presenting the solution to carriers, the demand for this solution started, and it immediately grants the carrier revenues without adding any infrastructures.

Where is this SMS messaging market developing to? "The field of applications for the cellular market is experiencing a surge of development," says Eshet. "The question is how can a new application be brought to the mass market. The direction is that a provider will want to provide these capabilities for the cellular handsets themselves. NTT DoCoMO, for example, has thousands of content providers, because it is an open-ended system. The communication providers wish to work with us because we develop rapidly - we have come from the cellular world and we understand them."

Eshet concludes: "Today there is great demand for attendance services. Another high demand services is polling services, mainly involving mass polls. This is implemented mainly by SMS messaging. Our SMS messaging solutions are very strong in markets such as India, where there has been a dramatic increase in the number of customers. We have been a profitable company from the onset, and apart from the initial investment in initial setup and development, we have been profitable throughout our operation. We are thinking of integrating Skype into the system - we are currently thinking about it".

CallUp Net is one of the world's leading SMS messaging software providers which designs scalable, reliable, creative, sophisticated and low-cost SMS, VAS, and MMS messaging software systems specifically for telecommunications carriers. CallUp is respected for its SMS messaging software and hardware which is based on open telco architecture that leverages existing Internet and telephony infrastructures.

While leading market vendors offer bulky and costly SMS messaging software equipment have patchwork solutions, CallUp Net SMS, VAS, and MMS messaging solutions software and hardware offers an elegant application that focuses fully on the needs of telecommunication landline and wireless operators.

The CallUp MessageCase TM messaging software is designed with VAS modular features such as SMS, VAS, and MMS and can be easily upgraded to suit telecommunication mobile and fixed line (land line) operator needs.

The MessageCase TM VAS messaging platform will increase subscriber base and offer a significant revenue-generating tool for telecom carriers. The basic building block of the MessageCaseTM system is voicemail. VoiceCase enables the use of all the familiar functions subscribers are used to - record greetings, reply (boomerang) to the sender, erase, skip etc.

In addition there are more advanced voice features for more sophisticated users. MessageCaseTM UMCase Service The MessageCase Unified Messaging service provides the subscriber with Unified message box for voice, Fax and email messages which can be accessed any time any where. Subscribers may update user profile, redirect, forward and broadcast messages (to definable groups), listen to voice messages (as WAV attachments), view faxes on screen, etc. The users define where they would like their emails delivered, thus enabling them to continue using their existing e-mail accounts and software (such as Outlook or Hotmail) seamlessly e-mails which are sent to the box can be rendered via Text To Speech, in multiple languages.

The user can reply to emails with a voice message - the message is attached as a WAV file and delivered back to the sender. Faxes which are sent to the box can be redirected to a nearby fax. Emails can also be voice forwarded to a fax and printed in hard copy. MessageCaseTM also supports e-mail to SMS messaging. Aside from forwarding fax attachments to a fax of choice for printing, the FaxCase service enables Fax messages to be forwarded as email attachments thus providing an effective E-Fax service.

The simple SMS messaging MessageCase TM software solution utilizes a standard messaging system components, providing telecom carriers and operators with a reliable SMS, VAS, and MMS solution that reduces substantially both capital expenditures (CAPEX) and operating, administration and maintenance costs (OA&M).