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

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.