External Short Messaging Entity (ESME) is a term originally coined by Aldiscon to describe an external application that connects to a Short Message Service Center (SMSC) to engage in the sending and/or receiving of SMS messages.
SME is a term used in many cellular circles to describe a network entity (mobile/cell phone) that can send/receive messages. ESME (pronounced EZ-mee) is essentially one of these but without all the wireless aspects; i.e. it is connected via TCP/IP, X.25 or similar. On SMPP 3.4 protocol specifications ESME refers only to external sources and sinks of short messages as Voice Processing Systems, WAP Proxy Servers or Message Handling computers, and it specifically excludes SMEs which are located within the Mobile Network, i.e., a mobile station (MS).
Typical examples of ESMEs are systems that send automated marketing messages to mobile users and voting systems that process SMS votes (Pop Idol, Big Brother).
SMSC uses protocols such as SMPP, , OIS, CIMD, SMCI all of which denote the concept of an ESME connecting to an SMSC.
ESME always connects to SMSC using a TCP/IP, X.25, etc. and then binds for the service it needs from SMSC.
For SMPP it can bind for Receiving only service, Transmitting only service or both (Transceiver service). Before SMPP 3.4 it was required to have two different connections, one for Transmitting and the other one for Receiving. Starting with SMPP 3.4 a Tranceiver connection is enough for both.
The relation between ESME and SMSC is somehow a master-slave relation because SMSC is providing services to ESME, and usually ESME just uses these services from SMSC. One of the functions of the SMSC is to store and forward the messages while the ESME doesn't have this function. When a message is sent by an ESME to SMSC towards its destination, this message may stay in a SMSC queue until its destination will become available. During this time the ESME has the options to cancel the message in queue, to replace it or to check its status. ESME can also send a message to multiple destinations which will be handled by SMSC.