Getting Political in 2012: The Power of SMS

Press release – October 11, 2012

By Andrew Berg, Wireless Week

In the age of NFC and mobile wallet solutions, the idea of carrier billing can sometimes seem less than sexy. And yet, the ability to charge everything from in-app purchases to donations to your monthly wireless bill is one of the most powerful payment technologies for both enterprise users, as well as consumers. Jay Emmet, general manager for OpenMarket, says one of the biggest opportunities for carrier-based billing systems he’s seen in a long time comes in the form of this year’s political contests.

“The big story quite frankly is what we’ve seen on the political donations side,” Emmet says. “Charitable giving, and to some extent charitable donations have always been an excellent use case for carrier-based billing, primarily because it’s driven by convenience.”

Right now, he says the space is primarily limited to the big presidential election coming up in November, but Emmett thinks the future is wide open. “I think this is going to have a profound effect. I don’t want to sound like I think I’m some kind of maven, but it really kind of democratizes political giving and takes a lot of the friction out of it. You can basically make a donation with 10 to 15 keystrokes.”

Emmet may not think of himself as a maven, but he’s pointing to a very real trend that will indeed be dramatically influencing political campaigns forevermore.

Even the Federal Election Commission (FEC) has taken steps to enable wireless subscribers to vote with their wallets. In June, the FEC gave its blessing to allow SMS donations to be made via wireless carrier billing, and as of August, President Barack Obama’s campaign became the first ever to accept political contributions through text message and carrier billing.

But Emmet doesn’t think the trend stops with giving to Mitt Romney or President Obama.

“When we see it at a federal, state or even local level, or add in political fundraising around super PACs. That can really drive a message home with that kind of opportunity and technology,” Emmet says.

To be sure, the effectiveness of carrier-billed text donations has already been proven. The Red Cross estimated it generated $32 million in less than a month in the aftermath of the Haiti earthquake in January 2010.

Emmet says the secret sauce behind the opportunity is hidden in plain sight, not to mention a mainstay of the wireless industry.

“A lot of people look at SMS and they think it’s an antiquated technology or too basic, or it’s a little unsexy,” Emmet says.

“But it has two characteristics that nothing else has. The first is that it works on every phone on every network out of the box. You cannot buy a mobile phone in the world today that does not have SMS capability on and lit and capable.”

The second aspect, Emmet says, is that virtually every connected human being is a trained user. “You would be hard pressed to find a person today that can’t send an SMS. Even my mother who’s 75, her grandchildren taught her how to text and that’s how she chats with them.”

There’s no doubt that SMS is more than an antiquated technology, when you consider that 5.9 trillion SMS messages were sent in 2011, according to research firm Informa.

Still, change is inevitable. While SMS traffic is expected to reach 9.4 trillion messages by 2016, IP-based networks could eventually mean a fall off, as instant messaging (IM) clients become the preferred method of text-based mobile communication.

In fact, Informa forecasts that SMS’s share of global mobile messaging traffic will fall from 64.1 percent in 2011, to 42.1 percent in 2016, as it loses share to mobile IM. For the time being, however, Emmet says that while he would agree that messaging may affect SMS, he prefers to confine the phenomenon to person-to-person communications, whereas enterprise users require the scale an ubiquity SMS for their uses.

“If I was a P2P product manager at a major telco, I absolutely agree that they’re probably seeing their traffic go down and being cannibalized by some of the OTT players,” Emmet says.

“But I think in the context of a major company interacting with their customer base, they absolutely need the ubiquity of SMS. You can’t do it by saying, well, I’m going to send one thing out over here to this guy with the Apple device, one thing over here to the guy with the Google chat client.”

If you’re looking for carrier billing or messaging solutions, you might stop by OpenMarket’s booth on the show floor. A subsidiary of Amdocs, OpenMarket provides a variety of mobile solutions for enterprises to engage and transact with their customers via their wireless devices.