The Current Premium SMS Fiasco, Explained – And How It Relates To The Tech Startup Scene
The past few weeks, Indonesian media headlines have partly been full about the issue of ‘theft of phone credits’, with the current developing story being, that the Indonesian Telecommunication Regulatory Authority (BRTI) has issued an official letter basically saying that all premium SMS services must be shut down.
To give a bit of background, since 2002, many companies, many of them essentially startups, took advantage of SMS technology and started running premium SMS services, where people who purchased or subscribed to these services would receive the various virtual wares offered by these companies, from ringtones, horoscopes, mobile wallpapers, quizzes to chatting. Due to the limited amount of data that the SMS protocol can carry, they had to be very creative in designing the services. Either the content delivered had to fit 160 characters, or the SMS had to provide a WAP link that would bring users to the content they desire. The industry slowly but surely flourished, with little or no regulation from the government – let alone support – and the premium SMS services have evolved from nice-to-have value added services (VAS) to an industry in its own right.
Jump to 2011. The push for more growth and profits from the premium SMS industry has caused some companies to be, um, too creative in their charging schemes to customers, with many consumers complaining that they could not unregister from certain premium SMS services, causing loss of money – some even not remembering registering for those services. The mounting complaints eventually brought BRTI to send out a letter to all the telecommunication companies to basically stop ALL premium SMS services.
Read the rest of the post on Dailysocial.