ESME(External Short Message Entity) is the name given to SMS Server(s) or SMS provider external to the SMS service provider network. Usually ESME server are owned by private business companies or government organizations that use SMS messaging service to provide various sms application such as Mobile Commerce(advertising), Mobile Banking by Banks, Email gateway (where email is send to sms gateway), notification applications, directory services, telemetry, vehicle tracking, cell broadcast etc. On the other hand, the SMSC server/ SMS server are usually owned by telecommunication or mobile operators (owning to the fact of  SMSC cost and operation cost). Both Entities are known as SMS provider but the telecommunication company or mobile operators are usually the sms gateway provider. SMS Short Codes or just short codes are given to ESME owners by the SMSC owners for identification purpose and connection between the ESME and SMSC servers. Multiple ESME servers can be connected to SMSC via SMS gateway. SMS gateway of SMSC is also the gateway for sending international SMS. The interconnection of SMSC with MSC and HLR is shown in this SMSC post. The status of the connections between the multiple ESME servers and SMSC can be viewed at the SMSC location. The connection between the ESME servers and SMSC server is such that, ESME server is connected TCP/IP or X.25 network (internet or leased line). The TCP/IP or X.25 network is connected to the SMPP server and then SMPP server is connected to the SMSC server. This is illustrated in figure below.

• Method of the ESME to access the SMSC

Fig: ESME and SMSC Communication

Interworking between the SMSC and ESMEs are categorised as:

1. Messages from ESMEs to the SMSC
2. Messages from SMSC to ESMEs

• Transmission mode between ESME and SMSC

There are two transmission mode between ESMS and SMSC

1. Transmitter Mode
2. Receiver Mode

1. Transmitter Mode

Fig: Messages between ESME and SMSC

• Major Operation between ESME and SMSC

The major operation between ESME and SMSC are:

1. Bind operation
2. Unbind operation
3. Submit_SM operation
4. Deliver_SM operation

Bind operation is carried out to connect ESME server and SMSC server. Unbind Operation is carried out to release connection between ESEM server and SMSC server. Submit_SM and Deliver_SM are operation carried out to send and deliver short message between ESME and SMSC server. There are two types of bind operation:

1. Bind_Transmitter
2. Bind_Receiver

All these operation process is explained below with figure.

The figure below illustrates the process of bind_transmitter operation between ESME and SMSC servers.

Fig: Bind_Transmitter (Bind Process between ESME and SMSC servers)

The figure below illustrates the process of bind_receiver operation between ESME and SMSC servers.

Fig: Bind_Receiver Process between ESME and SMSC

The figure below illustrates the communication process between ESME server and SMSC server for transmitting and receiving Short Messages

Fig: Short Message transfer between ESME and SMSC

Thus mobile user sends sms to ESME and is then send to by that ESME to the SMSC server and the bill is generated by counting the number of SMS send or received. The SMS count for each ESME account is identfied by the SMS short code given at the time of interconnection of the ESME and SMSC. The amount per SMS is subject to business policy between the two SMS service provider.