Unused text messages a gold mine for startup
Sell your excess SMS bundle for pocket money
With so many mobile-phone plans offering unlimited text messages, it’s easy to think of them as a cheap commodity. But a Seychelles-based startup, Canopus Technology Ltd., sees a mint to be made from SMS.
The business plan is certain to annoy wireless carriers and raises legal questions, according to researcher Mobilesquared. But Canopus is seeking as much as US$50 million through an initial coin offering to fund the technological infrastructure for its app.
Its service, called SMSChain, would let mobilephone users resell unused parts of their text-messaging bundles. Consumers with an unlimited text-messaging plan could potentially let SMSChain send thousands of messages from their phone numbers on behalf of companies that buy the texts in bulk. A car-sharing service could use your number to announce a driver’s arrival to a passenger, or a hair salon could text a client, “Your appointment is in two hours.”
Today, such companies buy text-messaging capability from service providers, such as AT&T Inc., or from so-called SMS aggregators. The latter can run special machines, containing multiple SIM cards — essentially, phone numbers — to send out messages. With SMSChain, they wouldn’t have to.
SMSChain’s blockchain technology would connect the SMS aggregators with app users, so the aggregators would be able to enjoy, on average, 40 per cent lower costs, according to Oleg Makarov, chief operating officer of SMSChain. His current company, TelQ, is an SMS aggregator, and he said other aggregators will be able to use the service as well. SMSChain Chief Executive Officer Andrey Insarov runs Intis Telecom, which focuses on SMS-related services for companies.
“There are a lot of people in the world that have SMS packages that aren’t being used,” Makarov said. “With this kind of an application, people can make much more money.”
App downloaders would be paid for every message. SMSChain says a user who resells 500 text messages a day could earn US$75 a month.
SMSChain isn’t taking responsibility for whether the service runs afoul of users’ contracts, according to the startup’s white paper. That’s a risk potential investors and users should take seriously.
“They are basically penetrating your account to send messages,” Nick Lane, chief insight analyst at Mobilesquared, said. “The fact it is an enterprise-based message probably would contravene your agreement with mobile operator.”
Still, a carrier may have trouble catching users sending fewer than 500 text messages per day, the startup said in its white paper. Such reselling may also be legal in some countries and would not violate a user’s contract with some carriers, said Makarov, who declined to name the countries or the operators.
Automated text messages — those messages you get from your hairdresser — are a nascent and fast-growing market. It’s likely worth less than US$10 billion globally, but growing 18 per cent to 20 per cent a year, Lane said.
In addition to the questions about violating wireless contracts, SMSChain’s app also raises privacy concerns: Message recipients will see the app users’ phone numbers. So if the message tries to phish or defraud the recipient, the app’s user may be in trouble, Lane said.
“Then all of a sudden that could come back to you,” Lane said. “It could be fraught with danger if you are a consumer downloading this app.” The team behind the app will make sure only legitimate messages are sent, Makarov said.
SMSChain is made possible thanks to blockchain — the hot technology popularized by bitcoin users that records transactions in an immutable ledger. With blockchain, SMSChain will instantaneously connect buyers and sellers of textmessaging capacity and facilitate transactions.