Auctioning Bulk Mobile Messages

  • S. Meij, L.-F. Pau
  • Computational Economics, May 2006, Springer Science + Business Media
  • DOI: 10.1007/s10614-006-9032-8

Why is sending individual SMS messages so costly to users?

What is it about?

The search for enablers of continued growth of SMS traffic, as well as the take-off of the more diversified MMS message contents, open up for enterprises the potential of bulk use of mobile messaging , instead of essentially one-by-one use. In parallel, such enterprises or value added services needing mobile messaging in bulk - for spot use or for use over a prescribed period of time - want to minimize total acquisition costs, from a set of technically approved providers of messaging capacity. This leads naturally to the evaluation of auctioning for bulk SMS or MMS messaging capacity, with the intrinsic advantages therein such as reduction in acquisition costs, allocation efficiency, and optimality. The paper shows, with extensive results as evidence from simulations carried out in the Rotterdam School of Management e-Auction room, how multi-attribute reverse auctions perform for the enterprise-buyer, as well as for the messaging capacity-sellers. We compare 1- and 5-round auctions, to show the learning effect and the benefits thereof to the various parties. The sensitivity will be reported to changes in the enterprise’s and the capacity providers utilities and priorities between message attributes (such as price, size, security, and delivery delay). At the organizational level, the paper also considers alternate organizational deployment schemes and properties for an off-line or spot bulk messaging capacity market, subject to technical and regulatory constraints.

Why is it important?

This work showed how end users, especially organizations, can save substantially in mobile messaging campaigns (like advertisement campaigns) by requesting offers by mobile operators and value added suppliers, instead of just accepting static tariff packages.


Professor Louis F Pau
CBS Group of Institutions

This paper has had regulatory impact in helping the EU Commission and the european regulators harmonizing competitive offers and lowering end user prices for SMS campaigns. On research side, further research will be conducted on : -combinations of more or other bulk messaging attributes ,and the adaptability of auctioning on these attributes; -use of a risk management tool incorporating the risk preference of the buyer in the planning of messaging capacity need or build-up , in the presence of supply-demand uncertainties ;it should also allow users to update their portofolio as situations change ,and give some tracking/analysis dynamics ; -comparison between auction derived prices and prices in the market otherwise -possibly extending the bulk MMS auction to include limited content provisioning bundles ; -optimize the execution for speed performance , in line with what has been done on bandwidth trading ; -further work on the automated SLA negotiation ( in collaboration with the Open Group Task force and Telemanagement Forum

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