Thus Spaketh Idd Salim

A complete Idiot’s guide on Making Money in Kenya using Premium SMS

by on Nov.30, 2009, under Coding, Symbiotic

Alot of times, I have been stopped on the streets [on my way to Laico for lunch] by many a coders with the same question. ‘Salim, I want to make money using SMS shortcodes and tun my own campaign ya kulipua mabilioni kama ile ya Safaricon. Nidosike kama Sebi na ninunue Kompressor sita za pink.’

So, being the big brother I am to a few, I always cancel my lunch and take the person to Savanna Loita, and explain it all.

  • How it works
  • How much money once can make
  • What different types of billings are available
  • What are the best people to partner with to get value
  • How to promote your service

Now, After the Arsenal Loss, I woke up refreshed and sober. I can share this with the public. So here we go.

Premium rate SMS services are a value-add SMS revenue model for Mobile Service Providers (MSP) customers, that is run by Premium Rate Service Providers (PRSP) and Content Providers (CP) to drive revenue via SMS and SMS-related services.

By Law, MSPs (Safaricon, Zain, YU, ME, Orange and PineApple) are not allowed to run ANY shortcode business directly or indirectly, as this would kill the small players (But we all know SafCom does it anyway, huh?)

To become a PRSP, you will need to pay KSHS 210, 000 to CCK for a license, and renew it anually for KSHS 100, 000. This allows you to book Shortcodes with the MSPs. If you dont have 210, 000, you can become a content provider and book a shortcode from a PRSP.

There are two types of shortcodes in Kenya.

  • Golden Shortcodes : (e.g.) 5050, 8008, 4441. Easy to remember, cute on the eye and cost KSHS 200, 000 application and a monthly of KSHS 10, 000 per month, per Network + VAT.
  • Normal Shortcodes : (e.g.) 4034, 2346, 4659 etc. Kawaida shortcodes for KSHS 10, 000 per month, per Network + VAT.

So if you want to run a normal shortcode on 2 networks (e.g. SafariCon and Zain), you need KSHS 20, 000 + VAT per month and you FULLY own the shortcode and can run your own services on it and rake in cash, as long as you can advertise them and make them popular.

So, Where is the money?

When you book a short-code, you need to decide the following:

  • What Billing band should it be? – Bands start from KSHS 3.5 per SMS where you make 0 (Read Zero) Shillings to one that the client gets charged around 100 bob per SMS. Most people settle for KSHS 10 to KSHS 60.
  • Should it be MO-billed, MT-billed or MO-MT billed? MO-Billed means user MUST have the money e.g. the 10 bob, on their phone before engaging you. MT means user gets billed once SMS lands on their phones. MO-MT is obvious. Means user gets billed half on send and half on receive.
  • How much money you want to make. Obvious huh?

So, How much money Do I Keep?

Well, I was hoping we dont fika here. This is the saddest part of the entire business. Normally, based on whether you are a PRSP or a CP, the moneymatics are as follows:

  • Unless you have received 1, 000, 000 SMSes on your shortcode, the MSP takes 50% revenue, PRSP takes between 10-30% of the remaining 50%. So, if you are charging 20 bob per SMS, you take home between 7-9 bob per SMS, PRSP takes between 1 to 3 bob and Safaricon takes 10 bob; bila adabu.
  • Zain have a better deal at 30% if your volumes are high.

Errrr, yeah. I will answer the rest personally.

Back to code.

:, , ,

  • isaac kangethe

    Your information is exactly what I needed. However I haven't found your address(es) phone and/ or email

  • iddsalim

    iddsalim at gmail ndoti com…. kwani what did u google to get here?

  • zackwerunga

    I need a normal short code, please send me a quotation as soon as posible. am doing a programe on Agenda 4 in rift valley and need to send sms to my mebers accross the region.

  • howdini

    Bwana Iddsalim, thanks for this info. Its very kind of you. In keep-it-to-yourself era we live in, its nice to find some people are not threatened with sharing info with people. Please tell me, I plan to use an opensource gateway (kannel) for my upcoming promos. What is your experience or what have you heard about its stability in the real world arena? I hope to setup a solution where I dont get called every 10 minutes to restart the gateway daemons.

  • iddsalim

    Howdini… Howyoudoingi? – hehehe could not resist that.
    Now, kannel is very stable. TumaSMS.com uses kannel. The issue with kannel is that most people expect to just install it and run, then happily collect revenue thereafter.

    You need to not that Kannel does a maximum of 100 SMSes per second, so you need MANY deamons to be able to hit the industry standard 1000 SMS per second.

    My Kannel deamons run for like 4-5 monthns non-stop. I use Kannel 1.4.3 on FreeBSD 7.0 64 Bit. So I would advice you use a Un*x system. Not Windoze.

  • howdini

    I'm soooo relieved to hear that about Kannel. I only recently left employment where I worked with commercial gateways. Now that I'm going it alone, Kannel seems to be the best starting point and was worried it wouldn't perform like the costly ones. But I have this one very troubling problem with Kannel…

    There appears to be a message loop, where i send out a message and the smsc sends back a reply and Kannel responds again and the smsc again…. I understand it has somethig to do with the max-messages setting, but if i set to zero I dont get my badly needed DLR reports, if I set it to one…. well, all hell breaks loose. If I can settle this one, I can confidently go Kannel all the way, and “start making some money”. Thanks in advance.

  • howdini

    Ok. I found the solution to this little problem. I realise this might not have been the correct forum for technical queries but had to try. The solution is simple, in your kannel config file set max-messages=0 under the sms-service group and max-messages=[any value] in the sendsms-user group. If you dont get this right, messages could keep circling back and forth in your system.

  • iddsalim

    iddsalim at gmail ndoti com.

  • Alejin

    Hi Iddsalim!

    Can you recommend any companies that offer premium SMS shortcodes for Kenya at all ? Many thanks, Alex

  • iddsalim

    I would, selfishly, recomment Symbiotic – http://www.symbiotic.co.ke

  • iddsalim

    Also, check out http://www.ims.co.ke and ad-tel.com

  • Oliver
  • Shirajoh

    Thanks man for this info. I really needed it. One question though, can you suggest a PRSP for me. Please, I need one immediately. Thanks in advance.

  • http://twitter.com/tmuriuki Tadeo Muriuki

    This is very helpful. I have been wondering how it works. Thanks.

  • Angie Centra

    have you seen the new rates????? Safaricom has shamelessly reviewed rates downwards by 10%…… you have to deliver Million plus MTs/Mos to make (70%)money , and in effect make them even more money…. blatant thievery

  • Anonymous

    hehehehehe… sisemi kitu.

  • Steve Nguru

    are you a God-send or what? I was just exploring this whole business of short codes. you have put it very simply in a way no one has (read PRSPs). Thanks. Could you shed more light on the USSD thing as well? Am aware its also an option, though skewed in favor of the MSPs.

  • Anonymous

    I could…

  • Peter Anyanzwa

    Hi Shiroja, I happen to work for a PRSP.If still interested in one then contact me through mutwasi@yahoo.com,

    Regards,
    Peter.

  • Peter Anyanzwa

    Hi, You may also check on Siltech Systems at ACS Plaza, Lenana Rd.

  • Useful Information

    Hi i read your information above and there are other options with higher “out-payments” to the promoter. These include using aggregator services. An Aggregator connects has direct connections to the mobile networks, For Instance Mobile Marketing Group http://www.mmgrp.co.uk they are based in the United Kingdom but have connections in over 100 countried and to the mobile operators in Kenya for their clients who are promoting products and services their. There are no set-up costs, nor monthly fees. How it works is you have certain keywords on a shortcode, which will be registered to you. when a keyword is texted in from a users phone, they are charged, and an “outpayment” is made to you based on the charge rate. Typical “Out-Payments are around 70% of the revenue.

    Hope this helps everyone

  • Anonymous

    An AD this might be, But It is relevant to the post. So I will let it stick…

  • Okanog

    am  starting a mobile sms content business in 2 months time.please advice me on howi can get content  for my business.especially local content.as soon as possible.am willing to pay provided its genuine.0725618869.okanog@gmail.com

  • Stevn Mwema

    So which PRSPs take as low as 10% of the SMS revenue share?

  • Anonymous

    None.

  • Sts1927

    Hi, I have accounts with a couple of aggregators and do not want to use their own software for delivery’s and billing.
    I would much rather use my own software that can be integrated to their API.
    I am interested in a complete solution application for this.
    If you have such software can you contact me with costings.
    Thank You.
    sts1927@gmail dot com

  • kevin

    heylo men,
    am new in this stuff of short coding/mobile sms. i need a straight guide to know this shit. anyone who can assist me pliz hit me louiskevinah at gmail dot com. thanks a lot

  • Anonymous

    see mail..

  • Okanog

    hi peter could you please get in touch with me on 0725618869.or okanog@gmail.com.am planning to start a PRS company in six months time maybe you can furnish me with what it really takes to be a PRSP.THANKS

  • Gibuswangisansa

    This has funguad my eyes kidogo. Tell me which are some of the best means of making your short code popular – that is for a jamaa who has more dreams than cash to put in a business?

  • Robert onyoni

    I have an Idea that needs a short code to be effective. Mind contacting me robertonyoni@yahoo.co.uk or send me an email for advice on who PRSP are in Kenya. (am still an idiot…lol). Urgently though.

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