Since Upside Wireless was founded 4-5 years ago, one of my biggest challenges, being in North America, was to explain to people, venture capitalists, partners, potential clients, friends, even my family :-) why on Earth would someone want to send text messages instead of simply picking up a phone and calling someone. I realize that I failed miserably in my explanation job - people (North Americans) would simply shrug off my points and politely, as in not to hurt my feelings and to prepare me for the inevitable business failure, nod their heads and suggest that there may be other business opportunities for a guy like me.

One thing I quickly learnt was not to bother explaining any more. My philosophy was/is simple: one billion+ people cannot be wrong. And there must be a business in it when these same one billion+ people keep paying for each message they send (sometimes even for each message they receive - please see below). My fellow North Americans will most likely come to terms with text messaging - in time. So much for globalization - some people are simply unable to look beyond their own backyards and realize the obvious. Anyway, I believe that the reason for this slow adoption of SMS were:

1. In North America (NA) there are 2 (used to be 3) competing wireless standards: GSM, TDMA and CDMA. All the competition was on the voice side, manufacturers and wireless telecoms alike were making sure that they win on voice, data (SMS) services were not on the radar screens in most executive offices. SMS did not even work on many networks until early 2000, let alone being interoperable.

2. Lack of interoperability. This is like VHS and Beta. SMS from one wireless network simply could not travel to another wireless network. Until 2002, if you were on Verizon and your friend on Sprint there was no way for you to communicate using SMS

3. Inability to send SMS. For the longest time, users of certain wireless networks (CDMA most notably) either could not send SMS messages from their handsets, or had to first receive a Ph.D. in wireless telecommunications in order to figure out how to do so.

4. Pricing plans - my favourite. North American wireless operators adopted the "airtime" billing model. In other words, when you are on-line you pay. This is in contrast to European/rest of the world (ROW) model in which the "calling party pays" (by and large). The problem here is in perception. If I do not pay for receiving then I am free to give my number to anyone - I still have control over when I use my device and how much I end up paying.

5. Wireless e-mail (this is another favourite of mine). Most mobile phones in North America have an email address associated with them. For example, if your phone number is 4152342222 and you are a Verizon subscriber, then people can send you text messages from any email client (Hotmail, Yahoo, Outlook) by simply generating email message and sending it to This e-mail address is being protected from spam bots, you need JavaScript enabled to view it This is GREAT, everyone can send FREE SMS (and by the way, the logic went, this puts Upside's business model into the "looser" category) until you consider the unintended consequences. It is true that anyone can send free sms. However, someone needs to pay - and in this model that is the recipient. Imagine than a disaster in making. A few guys sitting in a dorm, house, garage, igloo - anywhere in the world - with a few computers, some electricity and Internet access can SPAM ANYONE in North America as many times as they want. The killer is that this SPAM is not only IMMENSLY annoying, but also costly. One also MUST pay for it (or spend time with his/her friendly CSR who will - no doubt - reverse the charges).

All of the above (maybe a few more reasons - please comment) made the adoption curve of the wireless telephony in NA and especially SMS much flatter than that experienced in the ROW. While the above analysis may sound like a rant - it is certainly not my intention. I believe that we in North America have an excellent wireless coverage, a variety of options, LOW, LOW pricing plans and unbeatable customer service attitude. Business drivers simply pushed the industry in a direction which may or may not have been optimal. At the time, I am sure, the industry made the best decisions possible, given the priorities, available technology, constraints...

Either way, I think that North America is coming up BIG and STRONG in the text messaging space. The kids have realized its potential to be cool, to feel included in a special group of "texting buddies" and even to use the technology to send cheat sheets and make the class time a bit more lively. Business people certainly understand this - Blackberry (AKA crackberry) devices have been a HUGE success among the top tier executives. SMS is not intrusive, it is quick and can be used in social situations where answering a voice call would be consider simply rude.

We now send over 2.5 billion SMS per month (almost the same number as people in the United Kingdom do). Messaging is becoming ubiquitous, the Beta is dead and one can freely communicate using SMS with anyone in USA or Canada. This recent article in the New York Times (free registration required) certainly paints this communications medium as mainstream. As evidence of that the problems related to text messaging are popping up too. Kids are realizing that they may have to forego that new pair of shoes since their text messaging related phone bill ate into three monthly allowances. SMS is now becoming a significant component of teenagers' discretionary budget. There are reports of traffic accidents caused by people wanting to send a quick text while driving - for those there are three works of advice: DON'T DO IT. SMS is addictive and while it lets you communicate it can also waste a lot of time. I've been known to exchange 60 messages per hour, mostly useless yapping - and I am a particularly BAD thumb typist (this is one of the reasons we started Upside Wireless and ipipi.com).

All in all - I am happy with how things are progressing. I think that SMS brings more positives than negatives. As in everything, one must use common sense and use this medium for its advantages, not disadvantages. Our business is doing well, we have a growing number of satisfied customers and we see new patterns emerging (I won't talk about these :-) but you will see what I mean soon - just visit ipipi.com or www.smsto.net regularly). Oh, yeah. One positive consequence is that I do not seem to spend time any more explaining why someone would rather send a text message then pick up a phone and make a voice call.

It is just funny how a simple technology conceived in late 80's for the purpose of sending voice mail alerts to phone subscribers took a life of its own, grew into a $40b industry and changed lives of many people around the globe.

Source: Ipipi Blog on SMS and mobile culture