Big In Asia, Big In Europe
By Carlo Longino, Wed Aug 18 23:15:00 GMT 2004
Ringback tones' popularity in South Korea and other markets has European carriers excited about their propects, but an analyst offers a few caveats.
Just a year after SK Telecom launched the world's first ringback tone service in June 2002, a fifth of its users had registered for the service, and after two years, 8 million of the carrier's 30 million subscribers were using it, generating more than $9 million in revenue every month. The South Korean operator's success caught the attention of carriers worldwide, always looking for services to boost their ARPU.
T-Mobile launched ringback tones in Europe at the end of 2003, and said in June of this year it had 500,000 users in the UK, Germany and the Czech Republic, while Vodafone, Telefonica and Tele2 in Germany, Spain and Sweden, respectively, have also launched. Ovum analyst Michele Mackenzie says that while the overall outlook for the tones in Europe looks good, operators face a number of challenges to ensure their success.
She makes her first point pretty self-evident: ringback tones are hard to describe, explain and market. Mackenzie calls them "personalised dialling tones, which are assigned to the caller by the called party," which, while accurate, isn't going to resonate too well with general consumers. It seemed earlier in the year that carriers and vendors were finally selling solutions and services to consumers, not specs, and ringback tones highlight this challenge.
T-Mobile UK calls its service "Caller Tunes", and describes it by saying, "Put a Caller Tune on your mobile and anyone who calls will hear your favourite song over the 'ring-ring' until you answer." It's simple, but is it simple enough? Ringback tones are such a radical change from the tones users have been accustomed to their whole lives that it may take a long while for the idea to sink in. Adding to the confusion is that ringback tones are a slightly bizarre kind of personalization. While a user hears their ringtone every time the phone rings, they'll presumably never hear their own ringback tone, removing them a bit from the experience.
Mackenzie also says that managing a ringback-tone service can be complex, but carriers are likely to not be deterred here. There are now enough vendors selling ringback tone systems -- even SK Telecom exports its system to other carriers -- that much of the work can be outsourced. Further buoying carriers is the fact that only they can provide the service to their customers, and they don't have to worry about losing their grip on revenues to third-party vendors, as they have with ringtones and other personalization content. This alone likely explains much of their interest. European operators will, however, have to work to find a way to make ringback tones fit pre-paid users, who aren't used to paying monthly subscriptions.
But it's Mackenzie's last point that's perhaps the most relevant -- what if ringback tones aren't something that has broad appeal outside Korea, or other Asian countries? She says that NTT DoCoMo in Japan and M1 in Singapore haven't fared so well, and clearly T-Mobile's subscriber figures -- from a total pool of well over 40 million users -- aren't as encouraging as SK Telecom's.
It's not to say that ringback tones won't find any popularity, far from it. But if European carriers are hoping they'll generate revenues on par with ringtones, they're going to be disappointed. Just because so many mobile successes have started in Asia doesn't mean that every popular service there will translate outside the region.