Mobile Messaging
By Wendy M. Grossman, Tue Oct 08 00:00:00 GMT 2002

Many operators are on standby mode when it comes to inking MMS roaming agreements. But why?

Be the first person you know to have an MMS phone! Snap pictures with your phone and send them to your friend, family, etc. But what if your friend lives in a different continent and does not own a MMS-enabled phone?

The truth is MMS experience is not entirely “picture perfect” right now. Like any type of communication, the value of MMS lies in what economists call "network effects." That is: numbers.

It’s understandable that MNOs have their eye on MMS – "SMS on steroids" – as a savior. Worldwide, mobile phone users sent 27 billion SMS messages in May 2002, and the number is still growing at a fast clip, and SMS accounts for roughly 12 percent of operator revenues in March 2002, according to Forrester Research.

But, "So far, MMS is still a bit of a mess," says Dario Betti, an analyst with Ovum and author of a research report on MMS. Betti believes that MMS needs to achieve the critical mass of 25 percent before it really takes off – and he predicts that won’t happen until around 2005. Ovum predicts that annual subscriber revenues from person-to-person MMS will reach around $31 billion by 2007.

Only Interconnect

It may be a long wait, both for the MNOs and for users who lured by ads promising instant pictures. For most users, MMS is difficult to get working, requires several different subscriptions (voice, GPRS, MMS), is confusingly and inconsistently priced, and expensive. One big hole is interconnection and roaming; Ovum SMS only really took off when it became possible to send messages seamlessly between operators.

A relatively small number of roaming agreements have been announced. German T-Mobile subscribers, for example, should be able to exchange MMS with subscribers on its already announced GPRS partners, which besides its own subsidiaries in the UK, Czechoslovakia, and the US, include Sonera in Finland, Orange in France and Switzerland, Switzerland’s Sunrise, Italy’s TIM, Poland’s Era, and Spain’s Telefónica. Sonera, which supplies interconnection technology in the form of its GPRS Exchange (GPX), has demonstrated interoperability with Estonia’s EMT and Hong Kong’s Aicent, and in June launched MMS roaming with Hong Kong CSL.

Most of these agreements are small potatoes. What users, for example, really want is not the knowledge that if they are on T-Mobil in the UK and know someone in Hungary who uses Westel they can send them MMS, but that that they can send messages to their friends on any service.

"When we launched back in August," says Helen Connor, UK product manager for MMS roaming for Orange, "we were campaigning for interoperability among networks, but because we’re all launching at different stages it’s difficult. We’re aiming to have one major operator on board by Christmas." The company hopes to be able to offer at least some roaming by the second quarter of 2003. mmO2 launched its service October 1.

Charles Golvin, a senior analyst with Forrester Research, thinks the roaming issue goes beyond MMS to include GPRS and data services in general, and that it’s of key importance: "A big part of the value of converting someone to being a data user is based on some kind of gotta-have capability. And you’d better have that with you wherever you have your phone." Certainly, surveying the many complaints on user forums it’s clear that GPRS roaming (quite apart from MMS) is barely available for most subscribers – and hugely expensive when it is available. One O2 user, for example, reports being charged £7.05 a megabyte while roaming.

But, he says, "I think with GPRS and MMS the impediments are much more about getting subscribers onto the network at all, rather than being able to use the service anywhere." Dhaliwal has actually received an MMS: from a random stranger who wanted to test the system and sent him a picture of a brick wall.

Pictures: Cost a Thousand Words?

Josh Dhaliwal, co-founder of the Wireless World Forum, think the reason MNOs aren’t talking about their interconnection agreements is that there are compatibility issues in the back end systems. Quite apart from any technical difficulties that may exist – both he and Betti say these are not huge – he thinks the big problem is billing and pricing.

"There is no standard pricing for either MMS or GPRS," he says. He points to T-Mobil’s UK pricing as a prime example: £20 a month for 10Mb (about 350 messages, probably), a seemingly mad price point for an untried technology with almost no users. Unlike SMS, MMS has no predictable length, which may be an asset for consumers but is a real difficulty for MNOs.

More operators, however, are settling on per-message pricing, usually around €0.50, roughly three times the average cost of an SMS without whatever roaming charges are eventually announced. These are not necessarily consistent within a single operator’s territories. mmO2, for example, has announced different prices for the UK, Ireland, and the Netherlands. A company spokesman admits these charges are what the company thinks people will pay based on its market research and what the competition is doing. However, Telenor, has announced charges more than double that (NOK10).

Westel has three price points, depending on the size of the message. One Hong Kong provider charges for GPRS usage and then a surcharge for premium content. Because mobile email will also be available and will be cheaper, many analysts believe, therefore, that MMS’s chief use will be as a personalized entertainment medium, and that it will develop differently from SMS as a result. Subscriptions make sense for entertainment services you want to receive on a regular basis; but for person-to-person communications per-message pricing is far more likely to appeal to consumers.

Orange’s Connor says that the billing issues created by roaming are much more complicated than simple variations in price. For one thing, most operators are proposing to charge each other by the megabyte of data. But most MNOs, wants to charge consumers more simply, by the message. Orange currently caps the message size at 100K, but figures that as the technology moves on and video becomes a possibility it will be necessary to bring in different price points.

More important, the technical limitations of the multimedia messaging center Orange uses mean that the company can’t identify the origin of a particular message. If a UK subscriber wants to send a message from France, the system needs to be able to distinguish this and charge accordingly – and currently it can’t. The company will have to solve these sorts of issues for roaming to become a reality.

In addition, there are currently only two MMS-capable phones on the market, retailing at €500 to €700. If you send an MMS to an ordinary phone, the person gets an SMS telling them to look at a Web link, either via WAP or via a PC, a solution Ovum’s Betti describes as "clumsy" and error-prone. Connor says this, too, is a difficulty: Orange’s system queries the subscriber database to find out whether the receiver is capable of handling MMS so the system can decide whether to send the full multimedia content or just text. But subscriber SIM-swapping isn’t recorded, and the information is not available for other MNOs’ subscribers.

The upshot is that for the moment, the market is primarily technically oriented "early adopters". However, this will change as more handsets come on the market and their prices drop.

Not Ready for Prime Time

All these difficulties are why Betti thinks the MNOs are setting themselves up for a WAPlash-style disappointment. "If you look at the way MMS is being marketed," he says, "they’re putting in people’s minds that they can send back pictures, and they’re going to have a short, sharp shock when they discover it doesn’t work." That’s why he believes the 25 percent critical mass is so important.

"But you don’t get there by trying to tell people to buy a very expensive phone and send expensive messages right now. It needs a soft launch, because the service is not really there."

In other words: patience all round.

Wendy M. Grossman is a freelance writer based in London, and author of net.wars. Her new book, From Anarchy to Power: The Net Comes of Age is out.