Now it’s a choice: Who pays for mHealth texts?

By: Brian Dolan | Aug 6, 2009        

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Brian Dolan, Editor, MobiHealthNewsEvery day more than 3.5 billion are sent. Some 1 trillion were exchanged throughout last year. Yes, the humble 160 character text message remains a considerably popular means of communication.

Disagree? We send more texts than we make calls: A Nielsen Mobile report last year found that U.S. mobile phone users sent an average of 357 texts per month in the second quarter of 2008 versus an average of 204 calls. So, remember: These are texting devices, not phones.

“Consumers are increasingly relying on texting as a form of communications,” CTIA stated recently. “It is quick, easy and affordable. Carriers offer consumers a multitude of text messaging options and we encourage individuals to work with their provider to ensure they’re on the best plan.”

CTIA also noted that only about 10 percent of wireless users in the U.S. pay-per-text message, most text users either have a bundled text message plan (a bucket of 200 for the month, for example) or have an unlimited plan for text messages.

The 10 percent of wireless users in the U.S. who pay per text, don’t need to be a worry for those healthcare service providers looking to leverage text messaging for appointment reminders, medication reminders or other healthcare-related missives. Those wireless users with a limited number of text messages in their messaging allowance should be of no concern either.

Premium text messaging company, mBlox, has just offered a new service called Free to End User, which makes it easier for service providers to ensure their customers won’t get billed for that text message they send them. So who pays now? Just the sender.

For example, if the staff at a doctor’s office wanted to offer a text message-based appointment reminder service to their patients, they might choose to use Free to End User to pay for the cost of the text messages, instead of having their patients absorb the cost. After all, if the reminders work, it might be worth covering the nominal fee to get more patients to sign up for the service.

Of course, with every step forward comes another challenge: How do you let them know that this text — just this one — is free?

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  • http://3gdoctor.wordpress.com David Doherty

    This is great work by mBlox as recipient-pays is another barrier that is holding back the US mHealth market.

    Isn’t it a shame this wasn’t initiated by the CTIA/operators?

  • http://www.golivesms.com Michael Scharf

    Brian:
    Each FTEU message is identified as a free message to the consumer. I would agree that employing this type of text message has made adoption, and consumer acceptance much easier. We have more info on this process at our site.

  • http://mobihealthnews.com Brian Dolan

    Michael,

    Thanks for the comment — can you explain how they are identified as free? What that might look like? Regardless, it follows that the end user will need to be educated about it. What form should that take?

    I have the non-texters in mind. Those who do not have a bucket of texts or an unlimited plan. Those users who are worried about being charged.

    Brian

  • Sock Puppet

    It’s quite shocking how certain aspects of the US mobile industry are so far behind the rest of the world. Not only has SMS been recognised as one of the key revenue drivers for operators in the rest of the world for at least 10 years now, but the pay on receipt model hasn’t, to my knowledge, been applied to any other market! Correlation anyone?!

  • Tom Moore

    Can this service be used for marketing (spam)?

  • http://www.golivesms.com Michael Scharf

    Brian: All free to end user text messages MUST identify be identified up front as a free message. That’s the rules of the carriers. You’re correct that non-text message users might be concerned about the pricing, hence the requirements.

    Tom: As to your comment regarding SPAM, the carriers have done a very good job keeping the SMS “highways” clear. The penalties to someone like us (with FTEU permits) are severe. We require that our clients have contracts with the consumer before we will send a message on their behalf.

    See our site http://www.GoLiveSMS.com for more info.

  • http://3gdoctor.wordpress.com David Doherty

    @Brian Dolan: Messages are identified as FREE by adding explanatory text to the message. Obviously this could be easily faked by spammers etc. but if it’s from a recognizable source (which could involve the use of caller id/phonebook entry) eg. a clinical practice you are registered with then there wouldn’t normally be any issue. The following is an example of what the patient of a mHealth care provider might see on their mobile:

    From: 3G Doctor
    Message: “FREE MSG: Your 3G Doctor Consultation Report is available for download. Sign in at 3gdoctor.com to view”

    @Sock Puppet: Canada is another recipient pays market. Even more interesting though are the “recipient gets paid” models eg. MVNO Blyk

    @Tom Moore: Yes sender pays is a popular choice for marketers but for the life of me I can’t see why a spammer would want to be so responsible?

    In my opinion the most exciting thing about this solution is when we enter the multimedia content market. The high and variable/uncertain costs of mobile data makes accessing video content a nightmare from the consumer perspective. Sending video content to patients can be very powerful but these uncertainties are hampering take up.

  • http://www.moblico.com John Styers

    Brian,

    Great article as always…just a few comments from an ex carrier guy…

    Remember that in the rest of the world, subscribers never pay to receive texts, just to send, so the US/Canada have a unique issue with the receiving party paying for these services

    What is not called out here, and very important, is that the costs being charged by mBlox, SinglePoint, Verisign, OpenMarket, and other Text Aggregators is actually HIGHER than the simple combination of the existing costs to the sender and recipient. The carriers are using this new pricing mechanic as a way to participate in the value chain and extract new revenues.

    Remember that AGGREGATORS DO NOT SHARE REVENUES with the carriers, except on Premium SMS programs (ringtones, screensaver, chat, etc). Any standard rate fees charged by an Aggregator are theirs to keep….100%. This is beginning to take a toll on the carriers, as their only source of revenue is from the 1.5-2 cents per average message they receive from Text Plan and Casual Usage Revenues (down from the 4-5 cents from four years ago).

    As you noted, only 10% of the market pays for texts on a “casual” basis and with the rising number of subscribers with text plans, the carriers are seeing a dramatic drop in the average revenue they see per text….the usage is going up, but the revenues are declining! The FTEU is one way for the carriers to participate….cant say I blame them, but the readers need to understand that 1 msg + 1 msg does NOT equal 2…its more like 3.5-4!

    This is a strong premium to pay for a culture that is getting accustomed to having text plans that simply cover all of their needs. If you looked at this from an Advertising perspective, it translates to approx $35 cpm, which is way steep for most campaigns!

    While we have been educating our health care clients as to the availability of FTEU for the past 4 months when ATT announced its availability, we are also identifying the trade offs. Basically, the incremental impact this FTEU service has on the business models versus the minimal value perceived by most of the patient population who do have a text plaln. Easy to tilt the scales in leaving things as they are.

    Subscribers already pay for voice minutes on their mobile phone, and therefore pay to listen/receive a voice mail. The minor potlential of an incremental cost from a text message should be weighed accordingly.

    David: Zero rating data fees on individual applications is available today by most carriers, however, the applications must reside within the carrier’s app store. You are correct in that it is more difficult for applications that are riding outside of the carrier’s app stores/portals. For those third party applications, FTEU will not solve the problem for data fees, and totally agree that we can only hope that this is a first step.

  • http://www.moblico.com Johnl Styers

    David, just as an fyi….FTEU was initiated by the carriers. mBlox is just one of the first of the direct connect aggregators to get the product out the door. I expect all the other aggregators will follow shortly. The carriers had to provide the internal technology to make this happen.

    Much of this work was part of the on going collaborative efforts within the Mobile Marketing Association. The Mobile Marketing Association is more focused on these types of business models and rules of engagement than CTIA.