Junk SMS is Big Business

(Nanfang Weekend)

"To customer of the Nanjing Construction Bank: On September 8,
you used your credit card to spend 4,800 yuan at Aiyima.
This sum will be deducted from your account at the end of the month.
If you have any questions, please call 02586872075."

"Our company offers loans and we sell guns, counterfeit currency, date rape drugs, stolen vehicles and surveillance equipment; we offer private investigative services and we will take revenge on others on your behalf; we can also issue documents to access the Internet, automobile license plates and any kind of invoice."  Zhang Liang (pseudonym) tapped in the last word in this sentence and then he hit the enter key.

Within one hour, more than 10,000 mobile phone started ringing to indicate that a SMS message has arrived.  The mobile phone owners glanced at the message from this unfamiliar phone number and most of them deleted the message in annoyance.

Zhang Liang does not mind this outcome.  He is only in the business of sending out SMS messages for clients.  Soon, a number of replies began to appear on his computer screen.  Zhang Liang forwarded these messages to the client, and this deal was completed.

He works at a private digital technology company in the Tianhe Scientific and Technology Park in Guangzhou.  In 2004, the company developed a new business -- to send SMS messages for clients with needs.  Previously, the company had developed an SMS sender which can send out mass SMS messages from a computer.

During the current period, SMS fraud is rampant in society and it was necessary for the company to curtail its business activities in order not to attract attention.  All the same, he still sends out more than 10,000 messages per day.

There are two types of SMS businesses for this company due to different service needs.  One type is commercial SMS, with the clients being large corporations who ask them to send out holiday greetings, birthday wishes and corporate communications.  The price is 6 cents per message.  The second types is those secret messages that are sent out by the special SMS cards and which appear at the receiving end as if they had been sent by another mobile phone.  These are cheaper at 2.5 cents per message.

The two types of services differ in costs by a factor of more than two, because the former is a fixed list which is supplied by the client, whereas latter uses a special SMS card.  Other than corporations, most customers use the latter service.

Like any other business, this type of service requires payment up front and then the service will be rendered.  The client pays several hundred yuan up front and provides a message with seventy or fewer words (including punctuations).  Zhang Liang then sends the SMS message to various mobile phones.  The computer is connected to more than a dozens SMS cards, and the messages are all sent out in a flash.

The message contents that Zhang Liang's clients are varied.  They sell lotteries, they are pimps, they do brand imagery, they "phish" for bank account information, they offer SP service traps and so on.  But he and others in the company never check who the clients are.

There are plenty of customers for the company.  From corporations to government departments, there is always the need to send out large numbers of SMS messages.  Through Zhang Liang's computer, they can enter a market with 370 million customers.  If one person out of 10,000 becomes interested in their service, the total number would be quite stunning.  Zhang Liang's company can also offer mobile phone numbers for the client, with an accuracy guaranteed to be better than 95%.

On October 16, when I spoke to Zhang Liang, I sensed that he was not embarrassed about having generated so much junk SMS.

"Frankly, you must have received something that I sent among your SMS messages."  Zhang Liang could not help but say as we chatted.

He did not realize that his job is no different from those people who posted flyers on building walls in the middle of the night, but he used the power of the Internet and technology to send those ads directly into the mobile phones of consumers.

Actually, there is not much technology in this service.  Zhang Liang said that with a mass sender, some SMS cards, a bunch of mobile phone numbers and a computer (sometimes, even the computer is not needed), massive numbers of messages can be sent.  Some individual users have purchased the equipment themselves and can send messages out from their own homes.

The mass sender is a certain type of GPRS sender that cannot ordinarily be purchased in a computer mall.  However, they are being openly sold on the Internet.

For example, a certain seller named Southern Business City claims that its mass sender was developed in conjunction with the Computer Science Department at a certain university in Guangzhou and they can also build customized software based upon client needs.  If a client buys any product, the company will enclose a list of national phone numbers worth 200 yuan.

Zhang Liang told the reporter that the theoretical principles of the mass sender are quite simple, and the mail senders from various companies are more or less similar and priced at between 800 to 2,000 yuan.

Among the equipment, the most important components are the SMS cards.  Without them, the other equipment is just useless electronics.

These SMS cards look the same as other publicly sold SIM cards for mobile phones.  When a message is sent out, the number in the card will be shown.  The card can only be used to send SMS messages and it cannot be used for conversation.  When someone calls back, the voice message says that the number has been discontinued.

All SMS messages have to go through the telecommunication operators and therefore incur costs.  Consumers are familiar with SMS messages that cost 10 cents or 15 cents per message.  The monthly card is cheaper, and the cheapest service right now is the UP New Force service from China Unicom, which charges 26 yuan per month, including 150 intranet messages and 500 general messages.  This works out to 4 cents per message.

But the SMS cards are even cheaper.  A card that costs 100 yuan can send 5,000 messages at a cost of 2 cents per message.

Most people do not have the means to lay their hands on these types of cards.  But Zhang Liang explained that his company has "connections inside China Unicom" and if they have sufficient supply, they will even re-sell the cards to people who purchase equipment from them.

The reporter asked China Unicom about this, and the person in charge of quality control said that the pricing of China Unicom SMS messages were determined by internal departments.  However, certain websites and service providers may have signed agreements with the local China Unicom units and therefore they are charged different prices from consumers.  That is understandable.  The corporate headquarters does not interfere with the arrangements made by the local China Unicom units.

At the Guangzhou China Unicom marketing department, the spokesperson was surprised because this was believed to be impossible.  The company has never offered these types of cards and the spokesperson even wanted the reporter to provide the list of websites which sell these SMS cards.

If these SMS cards really came out from China Unicom units, then they are the beneficiaries.  But sometimes, they get hurt as well.

According to an anonymous China Unicom source, the cost among the operators is usually more than that.  Certain underground SMS mass senders can exploit the technical flaw in the mobile phone platform -- when a card has theoretically expired or exhausted its stored value, there is still a 10 minute period during which massive numbers of messages can be sent out.  Afterwards, the card is just thrown out.  But one operator is therefore obliged to bear those costs to other operators.

Sometimes, it is found that several tens of thousand or even hundreds of thousands of SMS messages were sent even though the operator had been paid for only a few dozen messages.  If most of those messages go outside the network, then the operator should rightly be incensed.  Besides, those messages take up system resources and block other users from smooth access.  The operators do not want to see their customers unhappy and looking to find alternate suppliers.

But Zhang Liang tells the reporters that each SMS message takes 3 to 5 seconds to send, so that a card can send only about 20 per minute, or 200 in 10 minutes.  Thus, it is not really feasible to exploit the technical flaw.  The world believes that mass sending of SMS is rapid, but that is only because multiple SMS cards are used at the same time.  Presently, they can control only 18 SMS cards at a time from the mass sender equipment.

Zhang Liang seldom thinks about the social consequences of his work.  He is just a worker.  Based upon the current conditions, his company nets 1,000 yuan per day.  Recently, the company began to talk about "professional ethics" and will only send out SMS message during the day and they will not disturb people from resting at night.

But if the consumers receive the message from an unfamiliar number and actually believed it, then the consequences can be serious.  In Beijing over the national holidays alone, more than 1,000 mobile phone owners complained to the banking authorities that their financial information was stolen and abused via SMS fraud, with one person losing as much as 100,000 yuan.  So junk SMS has become a social pestilence.

Since last April, the Department of Telecommunications has asked the telecommunication operators to monitor the service providers and published the "Notice concerning the regulations about the problems with SMS."  On September 26, they published "Notice on further controlling the dissemination of undesirable information over mobile communications networks" which emphasized more monitoring of telecommunication operators and service providers.  In the near future, there will be more specific regulations due to be published.

Since August this year, China Mobile and China Unicom have announced the list of SP violators to the media.  But even under these circumstances, junk SMS has gotten worse instead of better.

According to Zhang Liang, the current actions of the government do not affect their business.  The only problem is that the SMS cards that they used to get two to three months ago for 1.4 cents per message are no longer available.

Zhang Liang is concerned that his job will not last long.  But his friends tell him that it is no big deal even if there is an investigation.  The company sends out fewer than 10,000 messages per day, so it is really small fish.  At worst, the cards will be voided.  But cards are thrown out afterwards anyway, so they will just get another number and continue on!

Zhang Liang's company falls into the blind spot of the regulations.  According to China Mobile's spokesperson, the operators can monitor the SPs effectively.  But when some people use mass sending equipment to sent out junk SMS messages, it becomes difficult to monitor.

Certain provincial China Mobile units have developed some restrictions.  For example, there may be a limit on the volume so that each mobile phone number can sent out at most 100 messages per day.  If a mobile phone number has an unusual volume, it will be penalized by having the SMS send function blocked for the next seven days.

Concerning keyword filtering technology, it is difficult to control because the phrasing is often indirect suggestive and the words are being constantly changed.  Besides, in most cases, these can be put in place only after the message has gone out and therefore quite ineffective.

More importantly, the operators cannot delete these messages on behalf of the clients.  The clients may actually want to read some of the messages.  For example, some people regard offers of 'friendship' as an annoyance whereas other people actually like them.  At the same time, the operators must respect the right of privacy of their clients.

More interestingly, at a time when the monitoring departments turn their attention towards the service providers, certain illegal service providers have moved to ask companies like Zhang Liang's to sent out SMS messages on their behalf.

Based upon the current situation, these underground mass senders are the principal and most active factors.  The monitoring of these underground mass senders is the key to thoroughly solving the problem of junk SMS.