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For whom the text beeps By Amitai Ziv The story of text messaging, or Short Message Service, is one of the most fascinating in the history of cellular communications. Nobody could have predicted the phenomenal success of the service, which was born as a convenient way for technicians to communicate. In a candid moment, Amos Shapira, the CEO of Cellcom, confessed at a recent convention in Rosh Pina that if anybody had suggested sending messages by laboriously typing them out using the less-than-convenient keyboard on cellphones a few years ago, he'd have booted him out the door. Texting consists of transmitting a short message from one mobile phone to another. It's become a "killer app" - or highly sought application. Some won't accept voice messages at all and instruct callers not to even bother, just to send an SMS. The service is especially beloved of the cellular service providers around the holidays, mainly Pesach and Rosh Hashana, when Israelis use the service to text each other greetings. Before Passover this year, Cellcom predicted a 40% spike in texting compared with normal days. On the night before the holiday, the company estimated that 25 million messages would be sent, compared with 8 million to 10 million on a normal day. Last year, on the eve of Passover, 20 million messages were sent. Advertisement About 3 billion text messages are sent a year, estimate industry sources, and the number is constantly ramping up. It's big money to the cellular companies. The only company that separates texting revenues from other sources of income in its financial statements is Partner Communications. In 2008, revenues from SMS usage were NIS 325 million, an increase of 28% from the year before. Cellcom and Pelephone are conservatively estimated to have made about the same, giving the market a worth of about NIS 900 million a year, or 5% to 6% of all cellular-related revenue. Text messages are small data files. The burden they impose on the cellular network is minimal. Most text messages comprise just a few kilobytes of data. "The ratio of income against the volume of data makes texting the wet dream of the cellular companies, from the commercial perspective," one cellular executive says. Network interconnection fees drive home the point. When a Cellcom client calls a Partner client, Partner pays a transmission (interconnection) fee to Cellcom, that's supposed to cover the cost of transferring the call from the Cellcom network to the Partner one. The fee is 22 agorot per minute to cover the call transfer cost. But the interconnection fee for a text message is 3 agorot. The price to the consumer of sending a single text message can reach 50 agorot per message. Clearly, it's a gold mine for the cellular companies, even though most customers pay less than that. For example, you can get a texting package and pay 20 to 30 agorot per message. When you send a text message to a company other than your provider, your provider pays 3 agorot to the competing company; about 3 agorot cover its other costs; and the rest is pure profit. If you pay 40 agorot per message, the company makes 34 agorot. A cellular voice call, on the other hand, will cost you say 60 agorot per minute. your provider pays 22 agorot to the other company (where applicable) and its other costs also come to about 22 agorot, so its profit is only 16 agorot per minute. A profit of 16 agorot out of 60 agorot (per minute) isn't bad, but 34 agorot out of 40 is considerably better. A more recent development is "premium texting," for instance SMS messages through which you vote on reality television shows. This is much more expensive, costing a shekel. Another example of premium texting is information services, such as the Bezeq 144 directory or directions from the Egged bus company. These will set you back between NIS 1 to NIS 1.50 per message. Charity drives can cost as much as NIS 10 per message. Then there are text messages that commercial companies send to you, offering special deals. That's a whole other source of income to the cellular companies, but this niche was badly hurt by anti-spamming legislation. There are no clear figures on Israel's market for premium text messages. Reportedly, the income gets shared by three elements: the content provider, the integration company that provides the service, and the cellular service provider. Another push for the humble SMS comes from companies developing added value from technology. TeleMessage, an Israeli company listed for trade in London, has two niche products. The first is an SMS solution for fixed-line companies, called Fixed Line SMS. What that means, is that fixed line users can send and receive SMS texts. Few know it but Bezeq has had a fixed line SMS solution in place from 2004. You can send an SMS to a Bezeq number, which then gets converted into a voice message. TeleMessage CEO Guy Levit says this niche solution didn't take off in Israel, though it's working well elsewhere in the world. The second solution is downloading software to the computer so you can send text messages directly from Outlook or a browser to cellphones. That's the product used by companies sending you offers. In Israel this technology is offered by MIRS, Partner and Pelephone. Another company trying to squeeze the SMS lemon a little more is SendM, headed by Ornit Shinar. It sells its technology to the cellular companies (and intends to sell directly to consumers soon). It also allows clients to text a large number of destinations by creating an SMS equivalent to email's "send to all" or "reply all" feature. For instance you could text all the people with whom you're connected on an online social network. SendM's business model is to increase SMS traffic for the cellular service provider and share the ensuing profit. For years technology mavens have been talking about SMS 2.0, the next generation of texting. One company that tried to expedite this evolution is Fontip, an Israeli company that allows handwritten text messages to be sent. Another company is Zlango, which invented a language of icons entirely for texting. The research company Frost & Sullivan believes that SMS 2.0 will succeed as cellular devices become more advanced. But the bottom line is that for the consumer, texting is not an economical mode of communication. One message costing 40 agorot is worth a 40-second conversation. The time it takes to tap out your message is equivalent to two minutes of conversation, if not more. Also, messages in Hebrew are limited to 70 characters. Pass that threshold by one letter and you're generating two messages at double the cost. If you send a lot of messages, you'd be best advised to check out monthly SMS packages, which can lower the cost to 22 agorot per message. There are plenty of solutions for sending SMSs from your computer at low cost or even for free. The best-known service is ICQ, through which you can text for free. Spikko lets you send some messages for free from your email. TeleMessage allows consumers to download a program from its site, to enable you to send messages from Outlook, Explorer or iGoogle. Triplay enables you to download a tool to send text messages from Facebook or Firefox. In both cases the cost per message in Israel is 8 cents, or 33 agorot, which may be worth it for some consumers. Bookmark to del.icio.us   Hebrew harmony Watch American Idol star Adam Lambert singing in Hebrew Top recipes exposed Try the cheap way to eat in some of Tel Aviv's top restaurants

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