Premium-Rated Short Codes

Short messages may be used normally to provide premium rate services to subscribers of a telephone network. Mobile-terminated short messages can be used to deliver digital content such as news alerts, financial information etc. The first premium-rate media content delivered via the SMS system was the world’s first paid downloadable ringing tones, as commercially launched by Saunalahti (later Jippii Group, now part of Elisa Group), in 1998. Initially, only Nokia branded phones could handle them. By 2002 the ringtone business globally had exceeded $1 billion of service revenues, and nearly US$5 billion by 2008. Today, they are also used to pay smaller payments online—for example, for file-sharing services, in mobile application stores, or VIP section entrance. Outside the online world, one can buy a bus ticket or beverages from ATM, pay a parking ticket, order a store catalog or some goods (e.g., discount movie DVDs), make a donation to charity, and much more.

Reverse SMS billing or premium SMS service means that the user of the recipient phone rather than the message sender is charged for the cost of the SMS message received. It is also called MT (Mobile Terminated) Billing. Reverse-billed SMS messages are only sent if specifically requested by the phone user; however, many unscrupulous operators will send reverse-charged messages without prior consent of the recipient, which often go un-noticed by users on Pay As You Go plans without itemised billing. The consent may also be hidden in the fine print of an advertisement. A daily weather alert is an example of a service where regular reverse-billed messages are received.

In some countries, providers are required by law or regulation to provide a means of opting out of a service once it has been commenced. Most typically, this is achieved by sending a stop message (most typically, simply STOP) to the same number as the service itself.