We have discussed many times why mobile is an important channel and exploding. This IAMAI report about mobile VAS estimates the mobile VAS industry at Rs 2850 crores at the end of 2006 and is estimated to grow at 60% to touch Rs. 4560 crores at the end of 2007. Here is the split:
40% of this huge industry is the SMS we are sending to our friends and family every day. This got me thinking about the information present in each SMS. Given high churn rate of SMS, it seems like the information present is temporal and it is probably worthless once read, but personally I have found myself in situations where I regret deleting one. What if we give an ability to store all your SMS automatically? Nothing ever gets deleted. Just like your email. What is involved in offering such a service that could be tremendously useful? I found yahoo, aircel and handygo services in India that allow you to backup your SMS.
Yahoo service is one of the most well known and it has following rates. These SMS show up in your yahoo mail storage and will never get deleted.
Airtel, Hutch, Idea, Aircel, Spice, RIM - Rs. 3
BPL, Tata - Rs. 2
MTNL, BSNL - Rs. 1
These rates would cost me a fortune if I decided to backup every SMS I get that I do not know if I need it in future. I would rather send myself an email message with the short text contents incase I want to store my password, someone’s phone number, some account number etc.
What should happen if this service needs to succeed?
- Service should be dirt cheap, almost free. This needs innovation at multiple levels.
- Service should be transparent to the end user. Something like automatic backup at the gateway. Just like an email server.
- once stored, these messages should be easily browsable, searchable, taggable and shareable (fwd, download etc).
How do you make money from such a service?
- One time VAS - may be fixed cost.
- Free if you let advertisers look at your SMS to send you relevant SMS ads.
- SMS can be shared, tagged and searched by a social community around it that is looking for that joke that you got yesterday. This site can generate revenue, in turn subsidizing the cost of the backup service.
High barrier to entry?
All of this sounds really nice and one could set up interesting views on SMS data but the barrier to entry in this business is extremely high. Tie up costs with technology enablers and short code providers can be staggering. IAMAI research shows that most operators also ask for deposit of Rs 2 million and a minimum guaranteed volume of half a million SMS per month. Experts can tell me if there are ways to circumvent these costs.
Let me know what would you do if you want to enable a social networking portal around millions of short text messages?