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Originally Posted by SiMpLe
Consumer SMS and data plans in the US are different that that of Europe therefore allowing us greater flexibility in what we can offer them and what they or we incur as costs. Our delivery agreements also allow us greater control with regards to internal costs so our economic structure in the offering is not in the negative. If this was such a negative as you see it then what would be the benefit to offer it? 
SMS is based on Mobile Origination (MO) and Mobile Termination (MT). These are two charges, one for sending and one for receiving. Each carrier is different on how they charge end users for this message charges. For WAP (Internet) services it may be unlimited or it may be a fixed about of data downloaded for a set price (i.e. 10 MB of data download for $9.95 per month). If it is fixed then yes the end user will incur charges at some point but that can not be avoided. For example, if you text vote for American Idol (which is originated by the user) there may be a charge for the SMS that you send. This generally ranges between .02 - .05 cents per message. However, this is not part of Mobile Pimp so this part does not apply nor is a text message sent by the end user part of a data download package. |
I'm still confused.
- You pay for every WAP push (binary SMS) that is sent to an end user right? It is the price of an MT bulk - lets assume 7 cents.
- So a end user pays $30 for a membership per month @ mobilepimp.com
- If I download more than 429 images and video to my cell per month then you will make a loss on me as an end user. I understand that some consumers are charged for receiving WAP push so you may be receiving revenue share on this charge which may offset the costs. But if I am an AT&T user and not charged for MT termination on my tarrif and I download 428 images a month you've made a loss on me, right?
- As you say, there is no MO so you dont have any MO revenue share to offset this cost. Your MT WAP costs are direct cost-of-sale for you.
So what I was curious about is whether you've assumed that the number of people that will download 428, or anywhere near that number, of images/video will be small (i.e.you've taken a calculated risk) and that the net population will not download anywhere near this, so you wll make revenue from most users?
Once`WAP revenue share kicks in then I can see how this model will work very well but until that is available how do you reconcile the risk..or do you not see it as a risk?
Chris, CEO, BabeCell
ICQ: 261131833
http://www.babecell.com