Short messaging service has taken off in Europe while SMS and similar services have gained popularity in Asia. Now new generation wireless networks in the United States and abroad promise to deliver the next generation of messaging known as multimedia messaging service.
MMS allows subscribers to exchange static and moving images in addition to voice and data, giving users mobile access to video clips streamed over the Internet, e-mail with image attachments, videoconferencing and other multimedia applications. Businesses could use MMS to send subscribers active XML-based forms, like a magazine subscription form that could be stored and filled out later, for global commerce. For wireless service providers, MMS could help drive usage on new, faster 2.5G and 3G mobile networks and otherwise open the door to new revenue-enhancing applications.
So far, all commercial MMS launches have taken place in Western Europe and the Asia-Pacific region. Operators that have launched MMS commercially or promotionally include Vodafone in Germany, Italy and Portugal; T-Mobil in Germany and the United Kingdom; Amena in Spain; Optimus and TMN in Portugal; Telenor in Norway; Sonera in Finland; Mobilkom/A1 in Austria; Swisscom in Switzerland; Westel in Hungary; VIPNet in Croatia; and CSL and Hutchison in Hong Kong, says Chris Lennartz, marketing manager for CMG Wireless Data Solutions, which sells SMS Centers and other messaging solutions. Lack of phone availability has slowed early rollouts. Lennartz says the only MMS phone commercially available is the SonyEricsson T68i.
In North America, meanwhile, there are unlikely to be any commercial MMS services launched this year. Even when MMS appears on the scene in 2003 to 2004, however, its short-term prospects are questionable due to several factors including the absence of a strong mobile data culture and a highly fragmented wireless industry that until recently made it difficult to send SMS messages across networks based on different formats.
"Western Europe has had SMS for almost seven years now whereas the U.S. has only really had it in the last year or two at the most," says A. Dion Price, a senior industry analyst for Mobile Streams Ltd., noting that SMS traffic in Western Europe is 120 billion messages per month. On the up side, Price says SMS is growing at "an exponential rate in the U.S." Cingular Wireless reported a 400 percent increase in SMS traffic during its first six months of service. "By this time next year SMS will be a lot bigger deal in the U.S.," adds Price. "People will appreciate its potential to a much greater degree. MMS will come much later in the U.S. It won't be popular for at least another 18 to 24 months there."
Of course some North American carriers already are beginning to map out their plans for MMS as part of their 2.5G and 3G services strategies. Joe Hielscher, vice president of marketing at Mirapoint Inc., says three of the top 10 major U.S. carriers have announced plans to offer MMS this year. (Mirapoint sells a messaging system that acts as a universal store and access server for MMS, SMS, WAP, i-mode SMTP, MIME and other types of digital messages; the company is involved in 12 of the 41 global MMS trials being conducted today.) Cingular, Sprint PCS and Verizon Wireless didn't respond to requests from xchange for information about their MMS plans. But for its part, Sprint PCS announced in February a partnership with LightSurf Technologies to develop photo-messaging services to run over its new cdma2000 1X high-speed mobile network. However, these services are not based on the MMS standard and are unlikely to be available before late this year, says Lennartz.
Like SMS, many industry experts believe the youth market will make up the core of early adopters of MMS. (Business users also are expected to be a key target group.) Lennartz says research has shown youth have the spending power to purchase expensive MMS phones and services and could consider the new service as a means to express individuality, maturity or belonging.
But Price of Mobile Streams says operators are ignoring some MMS youth market dynamics. For example, MMS as a service is expensive compared to SMS, making it prohibitively costly to use; MMS handsets are high-end devices with high-end features like color screens and built-in cameras and could be prohibitively expensive to the youth market; and prepay MMS only will come later, so the millions of youth users who are not eligible for a contract phone initially will be cut out of the market.
 MESSAGING DATA
*About 20 percent of operator's ARPU in Europe and up to 35 percent of the ARPU in the Philippines is generated by data, of which around 90 percent comes from SMS. *In Western Europe, SMS traffic is about 10 billion messages per month and is forecast to rise to 12 billion per month in 2005. *In Asia-Pacific, SMS traffic is forecast to move from 15 billion messages per month in 2002 to 35 billion messages per month in 2005. *A mixture of pricing is emerging. T-Mobile is bundling 10MB's worth of MMS messages into a contract while others are charging on a per message basis, which seems to make much more sense from a consumer point of view. The price is 30 pence to 45 pence per message. *Gartner Dataquest expects worldwide revenue from all forms of mobile messaging to almost double by 2006, reaching $22.3 billion, up from $13.4 billion in 2001. *The Yankee Group predicts high adoption rates and premium prices will create a $10 billion multimedia messaging market by 2006, when messaging will generate $44 billion in annual service revenue. Sources: CMG Wireless Data Solutions, Gartner Dataquest, Forrester Research, Mobile Streams Ltd., The Yankee Group |
