USSD: Lost in the Crowd?


All day long I am surrounded by BlackBerry and iPhone apps and business models. After listening to an intriguing talk by Nathan Eagle, a Professor at MIT, I started to think about how a single application can be developed to reach everyone in developing countries (a much larger proportion of mobile phone users than those in developed countries). Nathan mentioned that some applications in developing countries use USSD protocol as opposed to SMS or data-rich applications. I wanted to learn more.

Here are some of my findings:

USSD (“Unstructured Supplementary Services Data”) is a mature core mobile-network technology similar to Telnet; it is session-based. In fact, it is as old as GSM technology — and guess what — it works on EVERY GSM-based handset from a Nokia 1100 to a BlackBerry Bold.

Mobile software developers are constantly trying to find a way to write (code) once and reach many (different handset models). USSD can work for some application types, but not all. USSD will not offer feature-rich capabilities, but it can send and receive data through sessions (no data is saved on the device), allow for navigable menus, and it can interact with billing accounts on-file with wireless carriers.

After doing some research, it seems as though this technology is predominantly being exploited in developing countries, where there have been some very creative uses of USSD applications.

Here are some of the many uses this technology can provide (at a much cheaper cost than SMS messaging — a huge consideration for communication in developing countries):
– Mobile banking and payments
– Point-of-sale banking (using your mobile prepaid account as the source of payment)
– One-time password request notifications
– Weather services
– Menu-based navigation of corporate or city services
– Advertising
– Voice Chat
– Roaming

As it stands, USSD technology is being underused primarily due to a lack of available applications and content providers, a lack of understanding, and a lack of motivation at the operator level. Only recently, Bharti and Vodafone have productized this medium by launching USSD portals; largely however, this technology is under-developed and under-utilized.

Comments on a LinkedIN thread about USSD showed the following benefits of USSD technology (post from Gaurav Sarin):
1) Handset agnostic – 99% compatibility of active handsets
2) Easy Surfing – browser based experience for customers
3) Free content discovery for customers – since most operators do not generate CDRs of USSD sessions
4) Real Time session with the server – faster & more secure than SMS
5) Higher reliability as compared to SMSSMS has a 70 -80% successful delivery rate

What are your thoughts on USSD?

3 thoughts on “USSD: Lost in the Crowd?

  1. I agree with you: There is an opportunity on USSD not explored, probably because it requires a big integration with the mobile carriers and it is a closed environment.

    I saw some examples of services in the banking area. Do you have examples of success services in community/entertainment area using USSD?

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