We posed six questions to senior execs in three companies in the mobile marketing/SMS business about what will happen once TRAI’s SMS Spam guidelines are enforced, what they wish TRAI had done differently, and also on whether they viewed the Bulk SMS business which brought more advertisers to SMS but also resulted in spam as a positive or negative. Here’s what they said:

MediaNama: Post the SMS Spam regulations, where will the Mobile Marketing money shift? Will it remain in SMS, or will revenue come from another source?

VV Raju, Founder & CEO, Way2SMS: The focus will shift from Push based services to Pull based services. Advertisers may have to use other media such as  Internet and Mobile web to pull the consumers to land on  their service. Services such as Click to Call will make BFSI Call centers busy. Out bound telecalling will turn to inbound to sell their services. Money will shift to internet and mobile web. We could also see more innovation from the front line SMS players to build alternate revenue sources.

Abhijit Saxena, CEO, NetCore: SMS will always be a key source of marketing on mobile. Other sources will definitely come up as well, but not necessarily at the cost of SMS

Raj Singh, MD, 2ergo: If (and that is a big IF) the regulations are effective in cutting down spam then clearly two things will happen 1) smaller database set available and 2) higher cost to send. Significant demand will remain in SMS, as it’s the simplest format for the type of SMB advertisers that typically send SMS today to understand. However, over time two shifts should happen: 1) more demand for genuine opt-in databases, 2) openness to look at alternative ways to advertise e.g. WAP ads.

MediaNama: Is it possible for the industry to ensure that not even 6 messages in billions go wrong, risking blacklisting?  How are you addressing this business risk?

Abhijit Saxena: Yes it is very stringent and prone to punishment due to error/mistake rather than purposeful violations. This is certainly very risky. We have put in place very robust processes to reduce this risk like using standard template for transactional messages and monitoring very closely on any deviations on the same before allowing transactional SMS to pass through.

VV Raju: The Intention here is not to commit a mistake. So, If 6 is not enough , i don’t think 100 too. Im not sure, how pragmatic TRAI is in this case. There are practical difficulties they have to address before taking any action on the culprits. For example, TRAI allows telemarketers to download updated list twice a week( Tue & Fri). What if in case the site is unavailable\down( that happened many times previously) on these important days at least for few hours. Legitimate services such as ours will end up delivering a message to a recently subscribed NCPR user.

Raj Singh: Practically it’s not possible, as some margin of error will be present even for bona fide companies who try to be fully compliant. We have operational processes and controls that ensure that before any SMS sending numbers are validated against the registry. This is all that can be done to mitigate the risk.

MediaNama: In hindsight, do you view the business model adopted Bulk SMS as a positive (which brought in advertisers) or a negative (which irritated customers) and why?

Abhijit Saxena: Bulk SMS and every kind of advertising has debatable acceptance from consumers. Would we not say that if we could today watch tv programs without ads in breaks than that will be preferable? Even SMS advertising is useful to consumers since it does communicate about the attractive offers available. However, what is completely wrong is when some do not respect the privacy of the customer who has choses to be in DND. I am confident that as a regulation if we strictly adhere to not sending messages to these customers, then SMS will become an even more powerful medium. There is a reason why SMS marketing is growing, it is because marketers are getting returns on investment and that is happening because consumers are responding to SMS communication!

Raj Singh: As with any coin two sides to this. What Bulk SMS has done is got advertisers putting their marketing money into mobile, which they otherwise would have taken elsewhere. So it has got a lot of companies to start using mobile for marketing. But the Bulk SMS providers have taken a more and more extreme short term view of the customer, to the point where they don’t care what they send to whom and when as long as there is a buck to be made. There is a certain balance and tolerance in all things like getting two or three marketing SMS a day. But when like today I get bombarded with over 20 SMS a day I as a consumer feel under attack from spam SMS. The lack of any ‘ground rules’ has resulted in an explosion in fly by night companies who have led us to the point where many consumers don’t want to get any marketing SMS period.

VV Raju: Primarily, businesses were built based on the current telecom ecosystem that we have. In India, we have so many innovative business models built around SMS. Businesses such way2sms,160by2,  SMSGupshup, netcore(MyToday) add tremendous value to consumers. Thats why these players were able to grow big. In my Case, I can still see, great opportunity to innovate around SMS.

Unfortunately, Bulk SMS became a business for so many unorganized players. That has created the entire mess up. These players does not know the basic dynamics in the business.  No Discipline, no ethical standards. No one wish to receive a commercial message at 2 AM in the night. This ultimately lead to the back lash from the consumers. Its definitely irritating and frustrating to consumers.

Most unfortunately, Negativeness  has dominated positiveness. Due to this, legitimate businesses and innovative business models around SMS  may have to face tough time.

MediaNama: If there was provision in the SMS Spam regulations that you think should be changed or modified, which is it, and why?

Raj Singh: I have more radical modification… we have two parties that are the root cause of SMS spamming, the buy (advertiser) and sell (Bulk SMS company) side. All the regulation is geared toward trying to more tightly police and punish the sell side. I think something should also be done to put pressure on the buy side to also fall in line e.g. they are only allowed to advertise with registered Bulk SMS providers who can guarantee full compliance to the regulations, if they don’t then they get fined.

VV Raju: TRAI should allow communities such as way2sms, smsgupshup, netcore and other large players to function with a slightly different set of rules with a control on the activity of these platforms. Probably, with a separate auditing for every 2 months on these players. Its important to protect the innovation around SMSing to ensure value addition to consumers.

Abhijit Saxena: The key element is to not restrict the number of industries which can send transactional SMS. The categories are very limited while there are many other industries which send out pure transactional communication to their customers. Also there should be a more open environment to opt-in. Consumers should have the option to opt-in to a particular brand/company rather than the entire industry. Opt-in is a powerful tool to ensure that a consumer is not disturbed by all but can yet receive specific promotional communication from a single entity.

MediaNama: Are there any positives to take away from these SMS Spam regulations?

VV Raju: Consumer End – Yes, they are relieved from spamming to certain extent. At the same time they may have to miss ‘value addition’ and innovation around SMS.

Business End –  Yes, businesses must foster Innovation in the way they do business. More discipline and respect on consumer privacy will help businesses stand out.

Abhijit Saxena: The strict approach against DND violations for promotional SMS will be most effective if implemented well.

Raj Singh: Firstly, the fact that this problem is being taken seriously and something has been done is a big positive. However, I feel that the biggest problem even before these new SMS spam regulation was of compliance to the earlier directives. There already was a DND, which in theory was meant to protect the consumer i.e. if I registered I would not get any SMS spam. But the Bulk SMS providers simply ignored it and in fact exploited it. I saw as example of this first hand when at my local Reebok store recently. While at the counter I had to wait for the shop manager get off his mobile. He was arguing with a Bulk SMS provider about the rate for sending SMS spam to 10 million consumers in Delhi. The shop manager ONLY wanted to send to the DND registered consumers but wanted a price of 2 paise, not the 3.5 paise being quoted. Once he got off his mobile I asked him why DND only, and he said ‘Sir, they are best customers’!!

MediaNama: Are there any loopholes in the current SMS Spam regulations? What do you think wasn’t addressed?

VV Raju: 1. Whats not addressed is, the kind of technology infrastructure they are placing and what kind of resources they are adding in order to function the whole activity smoothly to address every ones concerns. The success and failure of these regulations will depend primarily on these two.
2. No proper communication lines defined between TRAI and telemarketer/aggregator.There must be two way communication between TRAI and telemarketer/aggregator. TRAI must give a chance to telemarketer/service provider/aggregator to explain the reason for sending a particular SMS against which there has been complaint.

Abhijit Saxena: I feel that the regulations are quite stringent and need to adopt some of the suggestions I have made above to make them fully effective and yet not strangle the medium.

Raj Singh: It still relies on the Bulk SMS provider to comply by investing in systems, processes, controls and following proper business ethics. This is not only sub-optimal it will still lead to violations happening just as with the earlier DND registry because many Bulk SMS providers will feel the risks are still worth the buck they are making. The concept of a mandatory ‘black box’ at the telecom operator through which all SMS have to be routed is something that I feel may well be required to get us to a state of much better compliance.