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'Super cool' SMS expanded for small businesses

Clickatell CEO also sees texting growth in emerging mobile banking markets

February 28, 2011 08:03 AM ET

Computerworld - Clickatell announced Monday a Short Message Service (SMS) for small businesses that costs only $25 a month for 1,000 messages, a drastic reduction in price compared to its earlier version, which cost more than $2,000 to set up.

Clickatell CEO Pieter de Villiers described the Communicator 2 service as ideal for doctors or other small business owners who can use SMS in real-time to notify clients of upcoming appointments or cancellations.

The service allows a business to send a message from any browser using the capabilities Clickatell has set up in the cloud.

Clickatell also offers SMS services to 13,000 large businesses such as Visa. But the company sees growth in SMS for small and medium-sized businesses, de Villiers said in an interview.

SMS is an ideal way to get an urgent 160-character message to an individual or group, because users don't tend to ignore a text message on a phone as they might an e-mail or a posting on a Facebook wall, de Villiers said. Part of the reason is that users can quickly access a text message instead of needing to open e-mail or a social networking application after booting a computer, he added.

Plus, it doesn't hurt that young smartphone and feature phone users are heavily devoted to texting and tend to eschew e-mail, he said.

De Villiers estimated that 94% of all texts are read, and the response rate is high.

A doctor could save $3,000 a year by using SMS for appointment reminders, simply by lowering the number of no-shows, he said.

The original version of Communicator, on the market for 18 months, had fewer features than Communicator 2 and could cost more than $2,000 for set-up, a cost that Clickatell has reduced to attract more users. "A business can take an Excel spreadsheet and do an SMS campaign to communicate a priority message to all on the spreadsheet," he said.

Competitors to Clickatell on SMS include Sybase 365, MBlox and Syniverse Technologies, although de Villiers contends that Clickatell is the leader in SMS for small and medium businesses.

Clickatell also announced $12 million in venture funding from Sequoia Capital and DAG Ventures, among others, to help Clickatell expand into new service areas such as mobile transactions, especially in emerging markets.

Clickatell is already profitable, but the investment funds will help expand SMS for mobile banking in countries similar to Kenya where 10 million people already use mobile SMS to make transactions, de Villiers said.

In one example, he said that people with limited credit in many emerging markets use their cell phones to top off their pre-paid air cards by sending an SMS message. Thosecustomers will typically have an account at a remote bank that they visit rarely. The SMS message would go to the user's carrier to add more minutes to the air card, and the carrier would in turn electronically bill the user's bank account.

SMS is already used by many banks in the U.S. to help customers track their accounts, de Villiers noted. A customer can use SMS to check a balance or to receive a bank SMS notification that a checking account has fallen below a pre-set balance, all without the need to open a browser or launch an app.

"SMS is simple connectivity to anything in the cloud, and that includes tracking a package or reaching an account," de Villiers said. "It's super cool that you can use 160 characters to fetch anything in the back-end system."

Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld. Follow Matt on Twitter at Twitter @matthamblen or subscribe to Hamblen RSSMatt's RSS feed. His e-mail address is mhamblen@computerworld.com.

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