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We do recognize the format of the text, we may know what it is, we may use these codes on a daily basis to check our mobile airtime balance but yet we fail to understand the importance of this string of numbers.

This is a decade old technology which for a very long time dominated the way to check subscriber balance. It is called USSD; Unstructured Supplementary Service Data (USS) protocol used by GSM cellular telephones to communicate with service provider computer systems.

After the mobile industry started having a strong foot-hold in the market, operators quickly realized that there is a need to facilitate easy machine-to-machine communications to perform tasks that need a device (in this case, a phone) to query the network. Therefore, the protocol USSD was born. This protocol supplemented the existing GSM standards that were more focused on person-to-person communications.

Traditionally, Operators used the STK (Sim Toolkit) technology to facilitate their resellers and subscribers. STK is a technology that allows the operators to burn a set of commands into the Sim cards and define how the sim cards interact with the subscribers. This toolkit enabled the sim card to:

  • Drive the mobile interface
  • Build an interaction between the mobile network and the end user
  • Control the access to the network
With the advent of the USSD technology, STK was successfully replaced. Click To Tweet

 

The main reason for this was that USSD is deployed on the network, not on the phones.  Major differences instill upon the usage of both the technologies. First, to be able to use STK it is essential that the Sim card inserted into the phone is burned with the menu in them. The application is usually protected by the Sim pin, phone lock pin or both and are not visible whenever the phone is locked or there is no sim inserted into the phone.

Whereas, USSD technology is deployed on the network and not on the phone itself. The USSD service is located in a sender’s mobile network and any user who shifts to the respective network will have access to the USSD menu. When the user requests a menu, this initiates a real-time session between the mobile user and the USSD application platform when the service is invoked, allowing data to be sent back and forth between the mobile user and the USSD application platform. The connection remains open, allowing a two-way exchange of sequence of data. This makes it more responsive than services that use STK.

Secondly, to use the STK technology the user generally needs to setup complete processes and deploy hardware to support the functions. For every command that the reseller or subscriber sends through the STK menu, the operator needs to direct it to the relevant system handling the respective command. These commands are encrypted when sent out from the user end and decrypted when received at the operator end. This process of encryption and decryption delays the processing times of the requests. Therefore, the STK is a slower process as opposed to the real-time, quick and convenient sessions of the USSD.

Thirdly, there is a set menu that is burnt into the Sim for the STK technology. Making any changes to the menu a hefty process where operator needs to create new sim to integrate the new menu. Whereas, for the USSD, the operator can easily manipulate the USSD menu. The moment that these changes are deployed to a network, it is instantly available to all the users.

With the convergence of the internet and USSD, the founders of the USSD technology never envisioned instances where the protocol would be used for external applications outside of the internal operator network. It is a simple protocol with limited functionality. The USSD typically operated like this now:

USSD functionality

 

USSD service was adopted and used for different purposes by the mobile operators.

With time emerging trends surfaced which included the penetration of internet and smartphones and leveraging mobile data to transfer data over the internet. Click To Tweet

 

High success and penetration rates of the internet deterred the strong uses of USSD in such a way that little innovation has been made on top of it. However, there are countries that have very low internet and smartphone adoption rates. These are the areas that don’t have the luxury to use smartphones on such a large scale and the first preference of people living in these areas is the feature phones. These markets include parts of Africa, Central America, Europe, India and Southeast Asia.

One such market, where USSD replaced the STK technology, with the help of Seamless Distribution Systems, for the better is Ivory Coast. The operators in the area initially operated using the STK technology. The resellers used phones with sim cards with the STK which enabled them to interact with the operator as well as the subscriber. SDS offered the Operator to test the USSD technology in place of the STK. The operator at a very low level launched the USSD menu for its resellers and subscribers. Soon, the USSD menu was high in demand and the Operator demanded to replace STK with USSD for 2 main reasons:

  1. USSD menu is easier to change and manipulate
  2. USSD provided a better user experience as opposed to the STK

 

Launching services in Ivory Coast with USSD provided maximum reach and the technology’s ability to conduct real-time data sessions was useful specially when the Operator was trying to build an interactive menu based application, such as mobile initiated balance inquiry and topup application. USSD’s simplicity is what made it so powerful, as all phones easily supported it without the processing hardware demanded by smartphone platforms such as Android and iOS.

All-in-all USSD being one of the most convenient, fast & secure channels is used to carry out transactions in real-time. This channel is particularly preferred in order to reduce the transaction turnaround time. USSD channel enables the resellers to carry out Reseller-to-Reseller (R2R) and Reseller-to-Subscriber (R2S) transactions.  Other operations that can be performed using the USSD include:

  1. WAP browsing
  2. Prepaid call back service
  3. Mobile money services
  4. Menu based information services and
  5. Configuring the phone over the network

 

Among these, there are other use cases where USSD revolutionized the traditional processes. Countless industries took advantage from the technology and massive uptake can be seen in the banking, micro finance and insurance industries. USSD is the best available communications technology to deliver Mobile Financial Services (MFS) to low income customers. With an exception of M-Pesa in Kenya, majority of the developing countries are using USSD to deploy Mobile Financial Services and form a communication gateway between the customers and their mobile payment platform. Some worth mentioning examples include: bKash in Bangladesh, Wing in Cambodia, EasyPaisa in Pakistan, Tigo & M-Pesa in Tanzania and EcoCash in Zimbawe.

To conclude, it is safe to say that applications using USSD are a big part of an Operator’s portfolio and require a robust application platform to support the service. High speed, high reliability and ease of use are the key drivers of the USSD service leaving an important message for the Mobile Operators: USSD is still an important part of the future!