What Is USSD & How Does It Benefit Businesses?

USSD provides several opportunities for Telcos to better target and reach their various customer bases. This technology is both simple and powerful and is being used across applications to achieve several Telco-specific business goals and objectives, especially where emerging markets are concerned. To take full advantage of USSD and all that it offers, Telcos need to ensure that they have the correct solution. We deep dive into this technology and the benefits that USSD offers Telcos below. 

What is USSD?

USSD, or Unstructured Supplementary Service Data, is a global system for mobile communications (GSM) technology used for real-time, session-based communication between a mobile phone and an application program. It enables interactive services and applications, allowing for quick, direct interactions without needing an internet connection. This makes it a highly accessible tool for a wide range of mobile communication solutions.

Many liken USSD to SMS, but the two are very different. SMS’s can be stored on a phone and are not interactive, while USSD is interactive and cannot be stored. USSD, in simple terms, is often referred to as a real-time transaction, where subscribers can choose options for several capabilities, much like a menu. 

The simplicity of USSD is what makes this such a great tool. USSD does not require an internet connection to work, and it is supported by most mobile phones without the need for processing hardware which is essential for smartphone platforms like Android and iOS. In this way, USSD enhances inclusivity and communication, especially in emerging markets like Sub-Saharan Africa, where USSD applications such as M-Pesa have transformed the financial sector and financial services with USSD banking. 

According to GSMA, 527 million people subscribe to mobile services in Sub-Saharan Africa. In this region, smartphone adoption is on the rise with penetration having reached 51% by the end of 2023 and expected to hit 81% by 2023. With the growth of mobile internet users in the region expected to hit 518 million by 2030 and with a total of 751 million unique mobile subscribers expected to be in the market by 2030, USSD remains a real asset for this region. Especially where Nigeria, Ethiopia, DRC, Tanzania, and Kenya are concerned.

The opportunities do not end there for Telcos, especially when examining how USSD can be utilised to drive revenue, connect with customers, and enhance convenience. We explore this in more detail below. 

Understanding USSD: What It Can Be Used For

USSD can be used for a diverse range of applications, including:

• Mobile banking for financial transactions
• Customer service self-service options
• Customer Feedback collection
• Surveys and polls
• Information delivery related to mobile subscriptions
• Promotional campaigns or competitions
• Facebook and Whatsapp

How does USSD Work?

USSD is a transaction and interactive menu-based application. Below is the step-by-step process:

1. 1. A user will initiate a request: A mobile subscriber dials a USSD code (usually starting with * and ending with #, like *123#). The USSD gateway then sends the message to the subscriber’s mobile device.
   2. The code is sent: The mobile phone interprets the code as a request and sends it to the mobile operator.
   3. The request is sent to the application: The network forwards the request to the relevant USSD application, often hosted by the operator or a third-party service provider.
   4. The request is processed: The application processes the request and formulates a response.
   5. A response is sent back: The application sends the response back to the mobile phone, often through the same gateway.
   6. The session ends: The session is terminated once the user receives the response, or the user chooses to exit.

There are three types of USSD codes:

1. Dedicated USSD Codes: These codes are exclusively assigned to and used by a single organisation or service.
2. Shared USSD Codes: These codes are used by multiple companies or services. An aggregator often acquires a dedicated code and then allows various organisations to use different channels or extensions within that shared code at a lower cost.
3. Semi-dedicated USSD Codes: This type is dedicated to one account but can be shared among others.

An example would be an account balance enquiry, bank balance check, or airtime or data top-up. The subscriber will request this option from their application’s transaction menu and from there, the request will be sent via a USSD gateway to the USSD application (often hosted by the operator or a third-party service provider). The application will then respond to the request and provide the information required through the USSD gateway to the subscriber. 

These kinds of USSD applications allow a Telco to provide their subscriber base with information regardless of internet connectivity, making it ideal for broad reach.

The Power of USSD

We have examined how USSD benefits customers, but what opportunities does it provide for Telcos to enhance revenue and profitability? The top eight features of a USSD application are:

• Mobile advertising – Mobile advertising has shown to be very effective when used in medium combinations. USSD offers superior reach, specifically to lower markets, as it does not require an internet connection to work and is interactive.
• Competitions – Running competitions that work with USSD and social media, has proven popular because USSD codes offer simplicity for potential clients to enter the competition, so USSD provides reach to people you wouldn’t otherwise have engaged with.
• Chat and social networking – USSD apps can facilitate two-way communication without the need for data, for chat and social networking. USSD chat and social networking combine instant messaging and social networking as one service for subscribers, filling the need for basic instant messaging and social media applications to stay in touch and connected with their communities.
• Request for info – Used with other advertising mediums, USSD can be used as a call to action. The user makes use of the USSD code and follows the appropriate prompts if they are genuinely interested. The result is no time wasted with unnecessary communication with people who are just curious but will not end up buying.
• Please Call Me messages – Using a USSD code, users can send a “Please Call Me” message to another person or in a marketing campaign. In addition, the service can be monetised by using adverts after the message is sent. 
• Coupons and vouchers – An excellent method of acquiring new customers is with coupons or vouchers that offer free services or discounts. For example, when looking to migrate a customer from the 4G to 5G network, Telcos can utilise USSD vouchers and special offers to provide customers with a voucher code or opportunity to try the new network.
• Surveys – Using USSD, Telcos can SMS an invitation to participate in a survey, either to their entire user base or by using email marketing segmentation. Surveys can offer feedback from customers, or they can be used to obtain pertinent information for new products or services. USSD surveys effectively collect responses that enable Telcos to make better decisions and more effective marketing campaigns.
• Personalised messaging – USSD content can be personalised according to the information the user has entered. If requested, dropped sessions can be picked up wherever they left off.

These USSD features fulfil many different Telco business objectives and needs. These include: 

• Maximum customer reach – USSD is practically compatible with all GSM standard mobile phones. Since no smartphone is required, you are guaranteed to reach a wider audience as not everyone owns a smartphone, especially those in emerging regions. 
• Accessibility across networks – USSD can work across all mobile networks as the application only needs a connection to the GSM network, which is a global system, to work for mobile communications as it is not mobile or SIM card-based.
• High customisation – You can build different USSD applications to target your unique customer segment needs and requirements. 
• Enhanced customer experience – USSD is highly interactive, and the fast messaging allows subscribers to get the information they need fast, efficiently, and anytime from anywhere. It also provides ease of use. 
• Cost-effectiveness – a USSD application is extremely cost-effective to run and is a free service that subscribers can use, enhancing customer experience.

USSD Enabled by NextGen v.Services

There is no doubt that there are several significant benefits of utilising a USSD application for Telcos. To take advantage of all the opportunities and benefits mentioned above, you must have the right technology and infrastructure in place, like Adapt IT’s NextGen v.Services Unstructured Supplementary Service Data (USSD) Gateway. 

This NextGen v.Services USSD Gateway allows for real-time interaction and two-way communication with your customers enabling you to fulfil their need for information efficiently, fast and effectively. This is made possible by the following features:

• USSD Menu Builder – allows all locally hosted USSD menus to be created, viewed, and modified from this fully dynamic web-based interface. 
• USSD Rating Engine – which is supported by multiple USSD Gateway mechanisms. This allows for event-based rating, enabling subscribers to be billed once they reach a specific, predefined point in the USSD menu tree. If the menu entry point is used, this effectively becomes session-based charging. It allows for time-based rating in which Subscribers will be billed based on the duration of their sessions. This rating measure involves the reservation of funds, plus a commit and refund process. The reservation amount and charging interval can be configured. It also allows for premium ratings. Once subscribers reach a  predefined point in the USSD menu, a premium rate can be applied. This can be put into effect by allowing authorised WASPs to return a flag to the          gateway once the subscriber reaches that point

• Advertising Engine – USSD offers superior reach for advertising campaigns, especially in emerging markets, as it does not require any data or internet connection to work. This highly interactive engagement advertising platform is cost-effective and allows you to be more targeted in your marketing approach – reaching the right customers at the right time. 
• Please Call Me – This feature is part of our value-added solutions which enables a user to send free SMS messages to a recipient to call them. This solution is customisable and available through a USSD menu. This service can also be monetised. 

 

The above features make it possible for Telcos to take advantage of the opportunities that USSD applications provide which include: 

• Quick, simple service creation that brings faster two-way communication and messaging to users and creates a single real-time session between the handset and user. 
• Providing 100% market coverage by targeting customers across networks and handsets and enabling services that can be accessed from anywhere, at any time on any mobile device. 
• Versatility in terms of use. The scalable architecture of this platform can be used across applications such as mobile banking, rechargeable services, marketing campaigns, competitions and more. 
• Allowing for customisation and scalability that enables you, as a Telco, to deliver targeted service and engage with your customers seamlessly. 
• Offering monitoring and measurement of services and campaigns which allow you to determine and measure its success. Effortlessly access analytics and insights to make informed decisions on future activities, services and offerings.

Conclusion 

From the above, it is clear that USSD solutions like Adapt IT’s NextGen v.Services USSD Gateway provide several benefits to Telcos. These include creating two-way communication with customers, offering them more efficient services and methods of gaining information, maximising customer reach, and enabling the effective targeting of customers. These elements positively enhance customer experience and service levels which significantly reduce customer churn and increase profitability. We expect to see this technology transform and evolve in the coming years, especially where emerging markets are concerned. For more on our USSD Gateway, download our NextGen v.Services White Paper here.