In today's competitive world, differentiation is a significant factor in the success of the service provider. Once the basic services, such as voice telephony, are deployed, SMS provides a powerful vehicle for service differentiation. If the market allows for it, SMS can also represent an additional source of revenue for the service provider.

The benefits of SMS to subscribers center around convenience, flexibility, and seamless integration of messaging services and data access. From this perspective, the primary benefit is the ability to use the handset as an extension of the computer. SMS also eliminates the need for separate devices for messaging because services can be integrated into a single wireless device—the mobile terminal. These benefits normally depend on the applications that the service provider offers. At a minimum, SMS benefits include the following:

• Delivery of notifications and alerts
• Guaranteed message delivery
• Reliable, low-cost communication mechanism for concise information
• Ability to screen messages and return calls in a selective way
• Increased subscriber productivity

More sophisticated functionality provides the following enhanced subscriber benefits:

• Delivery of messages to multiple subscribers at a time
• Ability to receive diverse information
• E-mail generation
• Creation of user groups
• Integration with other data and Internet-based applications

The benefits of SMS to the service provider are as follows:

• Ability to increment average revenue per user (due to increased number of calls on wireless and wireline networks by leveraging the notification capabilities of SMS)
• An alternative to alphanumeric paging services, which may replace or complement an existing paging offer
• Ability to enable wireless data access for corporate users
• New revenue streams resulting from addition of value-added services such as e-mail, voice mail, fax, and Web-based application integration, reminder service, stock and currency quotes, and airline schedules
• Provision of key administrative services such as advice of charge, over-the-air downloading, and over-the-air service provisioning
• Protection of important network resources (such as voice channels), due to SMS’ sparing use of the control and traffic channels
• Notification mechanisms for newer services such as those utilizing wireless application protocol (WAP)

All of these benefits are attainable quickly, with modest incremental cost and short payback periods, which make SMS an attractive investment for service providers.