Thus Spaketh Idd Salim

Increase your SMS revenue to 155%.

Recently, the revenue share model for SMS services running on short-codes was revised and, as always, it anti-enterprenural.

As hot girls might tell you, I don’t like beating around their bushes and I always dive right to the meat of the moment and this being a weekend post, i will make it straight to the point, like me.

So, I will share model 1 of 3 and hopefully, it will be of use to someone.

The Locus Standi

The current revenue share model for Kenya is like this:

SMS Service on Safaricon

Government – 26% (16% vat + 10% excise),

SAF 50% (of what remains after tax) – if your traffic is less that 1M smses or 40% if it is more.

PRSP 20% (of your 100%, which is 50% of the after-tax value.)

You – A hefty 80%, from which you must the government another 5% with-holding tax.

So for an SMS service charging the client 10 bob per response, The share will be:

Govt : 2.6, Saf : 3.7, PRSP : 0.74, You: 2.96 (less 5% W/h tax : 2.812)

Same applies to other operators, give or take 5% from their share. or yours.

So, for you to make something sensible, e.g. 5 Bob per SMS, you must charge at least 20 bob.

The Solution

When I designed the Easy Hisa System for Standard Investment Bank (SIB) as an adaptation of our Mobile Stock Trading and tracking suite, we decided to try a different revenue model. Today, I will share with you the revenue model, so that you can use it to maximize on SMS revenues.

This model is simple and is applicable to banks, insurance companies, stock brokerage houses, bars and clubs etc. Think outside an in-existent box, and the possibilities are unlimited.

Success Story: How SIB is doing it

SIB Opted for a model that is simplistic and traffic independent. The profits are always HIGH and fixed. Client gets charged normal SMS rates to access the system, e.g. 1 bob for YU and 2 bob for Zain.

At SIB, I have setup a MODEM pool with SIM cards for all operators. All lines are the same e.g. 0711/0751/0734 (900009) and clients just need to SAVE their network number to their SIM as SIB.. or Broker.

Anytime a client needs to check the status of their shares order, balance etc, they just send a normal-rated SMS to SIB on their address book and we receive the SMS, process it and respond. Mara iyoiyo… Cost on their Airtime, 2 bob. Needless to say, SMSes come to the client using out TumaSMS gateway and are masked as the broker sees fit.

Now comes the big question. How does the broker make money?

The clients have been educated to see this as a convenience service and looking at the kawaida cost of going to your broker of KSHS 100+ coz of transport etc and the time wasted because of Jam etc not forgeting akina morio, they gladly pay the 10 bob SIB charges as a service fee for this service.

EasyHisa passes a journal to the internal brokerage system and charges the client’s trading account 10 bob, a revenue stream from which SIB keeps 100% profits. 10 outta 10.

So here, the client pays 12 bob to get information that would have cost them 100 bob. In 5 seconds when it would cost them 1hour+. SIB keeps 100% profit as opposed to 28.2%. Simple, Easy, Neat!

Jidosishe mzee, dont dosisha wadosi.

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