The Handover
By Joachim Bamrud, Tue Apr 29 00:00:00 GMT 2003

MMS is poised to pick up where SMS left off, but operators are facing technical challenges related to both.


Two key mobile messaging events recently took place on each side of the Atlantic Ocean. In the United States, three major operators started offering inter-operability for text messaging. Their offer, which comes a couple of months after AT&T Wireless started offering the same, is seen as a major breakthrough for text messaging in the United States. Until now, the operators' subscribers could only message other subscribers of the same carrier.

Meanwhile, Norwegian operator Telenor Mobil on March 12 launched what it believes was the world's first Multimedia Messaging Service (MMS), signaling the first of several MMS launches in Europe this year.

The two events appear to further cement the telecommunications gap between Europe and the United States. As European carriers are busy preparing for MMS, their U.S. counterparts are now trying to resolve any technical problems with basic SMS. As the first MMS terminals are being shipped in Europe, typical mobile phones in the United States still don't have SMS-capability.

"We're pretty much done with major technical challenges on SMS," says Esben Tuman Johnsen, a spokesman for Telenor Mobile, one of the pioneers of the service in Europe and one of the most successful operators globally in terms of SMS revenues.

The operator has gone from handling 1.8 million text messages in all of 1996 to today's level of 4 million per day. Now, Telenor Mobil is more concerned about solving any initial chinks with MMS.

"Since we're probably the world's first to have launched MMS, we can't rely on anyone else's experience," Tuman Johnsen says. "Getting a large amount of data to transfer smoothly and ideally on several different networks has been a challenge."

One of the challenges has been to get content providers to work within a new standard and no longer within the SMS-limits of 160 text characters, he says. In fact, content providers may face an even larger challenge as the first MMS devices - from Nokia and Ericsson - feature different screen sizes, according to Tuman Johnsen.

USA


On April 1, U.S. carrier Sprint PCS launched a messaging solution that enables its subscribers to send and receive text messages with other carriers. MobileSpring and VeriSign subsidiary Illuminet provided the solution jointly.

Sprint could not provide any statistics on messaging usage, but said that messaging is the leading data application on its wireless web service.

"As Sprint launches 3G in mid-2002... Sprint expects the popularity and amount of messaging to explode," says spokeswoman Jennifer R. Walsh.

MobileSpring also delivered the inter-operability solution used by Cingular, which launched its inter-operability service in March. The same month, a third carrier - VoiceStream - also started offering inter-operability.

The new offers are not just mere technical breakthroughs, but may lead to a dramatic increase in text messaging in the United States, experts say.

AT&T Wireless, which in November became the first to offer inter-operability, saw traffic more than double after that. "Since offering that capability, the number of text messages has more than doubled and nearly 40 percent of our customers send messages to other carriers' subscribers," says AT&T Wireless spokesman Ritch Blasi.

InphoMatch Inc., which delivered the inter-operability solution to AT&T and VoiceStream, reports that AT&T now has more than 30 million messages a month going through the inter-operability router. That comes on top of regular messages within the AT&T network.

"It means almost everything to the success of SMS [in the United States]," Donald Longueuil, a wireless analyst at In-Stat/MDR, says about the inter-operability breakthrough the past few months. "It cannot be stated enough."

The lack of cross-carrier SMS inter-operability has been the main challenge for the uptake and widespread adoption of SMS in the United States, says Linda Barrabee, a senior analyst with the Yankee Group.

However, inter-operability isn't the only challenge for SMS usage. Only about 20 percent of mobile phones in the United States are SMS-capable, according to Longueuil.

"The biggest technical challenge for the next year or so will continue to be roaming and inter-carrier support," says David Berndt, director of wireless/mobile technologies at Yankee Group. "While solutions have been created to assist with the inter-operator messaging, quirks will continue to pop up until the systems have been challenged over time."

Another major challenge is capacity, he says. "Operators will need to monitor their systems closely to ensure that they don't have a repeat of the problems AT&T Wireless had in New York City after it introduced Digital One Rate," Berndt warns. "It had more people signing up for service than it had anticipated and the system availability degraded quickly. It took a significant amount of time and investment in network capacity for [AT&T] to regain ...residents' confidence."

Obstacles for SMS growth also include non-technical challenges like pricing, user interface, consumers' experience with traditional PC's and level of patience with the often-more cumbersome experience of mobile phones, Longueuil says.

"Carriers must initially convince end-users to use their mobile phones for more than just voice, " says Barrabee. "Over the past year carriers have increased awareness of text messaging, and with broader interoperability they are expected to step up their efforts even more."

But, SMS in the United States will also face competition from corporate e-mail and mobile Instant Messaging, she warns. Although the latter could also help drive SMS usage since some IM services go through SMS servers, she says.

SMS roaming


SMS roaming within Europe is a relative straightforward matter, with consumers only having to remember to have input their country code in the relevant settings section beforehand (many operators ask all new subscribers to do that when they first sign up for service).

Usage likely differs strongly, though, depending on how much customers use SMS. British and Scandinavian users, for example, are likely among those that also use SMS roaming most, since they are used to receiving and sending frequent text messages.

Rather than technical hurdles, it appears that prices are the main challenges facing SMS roaming, analysts say.

"If you're a client of Mobistar in Belgium that has to roam using D2's [GPRS] network in Germany, the price for using 10MB of data suddenly goes from 15 to 100 Euro," says John Strand, president of Strand Consult and a leading international expert on SMS.

Another example: Subscribers of Danish operator Sonofon typically have to pay six kroner (approximately $0.71) for sending an SMS from Spain (a popular resort destination for Danish tourists and retirees) to Denmark, according to Strand.

"It's a consumer trap - and not much fun," he says.

Despite the technical hurdles in the United States, there has been some SMS roaming between European and U.S. mobile phone users, industry officials and analysts say. But it has been relatively limited and more a marketing asset for operators, according to Longueuil. Barrabee agrees. "While international SMS interoperability is on most of the major carriers roadmaps, it has yet to be implemented on a wide scale," she says.

However, the U.S. carriers are fully aware of the potential of international SMS roaming, Barrabee points out. "U.S. carriers recognize the potential revenue opportunities in international inter-carrier SMS, particularly when looking at Europe and Asia where SMS is extremely popular and volume levels are already high," she says. "The carriers also recognize strong potential opportunity for international SMS interoperability targeted at mobile professionals and/or enterprise customers."

MMS


Although most industry officials see MMS as ideally suited for 3G, the advanced messaging service can also be used over 2.5G networks and even 2G networks, some experts say.

"It's not really that key [to have 3G]. MMS can travel over 2.5G," says Longueuil.

Tuman Johnsen agrees. "It works just fine on GPRS," he says, referring to the 2.5G technology known as General Packet Radio Service.

While SMS will see a strong growth in the United States, MMS won't necessarily take off as much, analysts warn.

"I am skeptical of people's desire to purchase handset just because of its MMS capabilities," says Longueuil of the U.S. market. He predicts MMS-capable devices will have a penetration rate of only 4 percent in 2005.

Roaming may become a major challenge for MMS, warns Berndt.

"There will be challenges when subscribers roam outside of MMS coverage areas," he says. "While they may still get some of the message, the potential customer backlash could be significant if expectations are not managed properly."

Some industry participants say copyright protection will be key to getting sufficient content on MMS.

"We believe strongly in digital rights management, which will benefit us, consumers and the content providers," says Tuman Johnsen. "We'll be getting much more content if the providers know they are protected."

Many operators may decide to wait with extensive MMS offers until there is adequate digital rights solutions in place, says Strand.

And, as with SMS-roaming, prices may become a significant challenge for MMS, he warns. "The biggest problem will be prices," Strand says. "They [the operators] don't have a clue about what to charge."

Both industry officials and analysts expect MMS to take off in Europe sometime next year. Nokia's CEO Jorma Ollila has predicted that more than half of the phones sold by the Finnish giant this year will be MMS-enabled, but other factors such as networks and content have to be in place for full uptake, analysts say.

And even MMS-enabled terminals won't be enough, says Strand. "The first low-end terminals coming to market are monochrome, which I believe is a mistake. MMS requires color-screens to get that 'Wow' experience."

Despite all the hurdles, MMS should see significant success, experts say. "MMS is more fun and more exciting than SMS," says Strand.

Tuman Johnsen agrees. While doubting that MMS will reach the same level of success as SMS in a while, he sees it as a clear complement to SMS for both consumers and content providers. "Only the imagination will set the limit for what we'll see on MMS," he predicts.

Joachim Bamrud is an award-winning journalist with 17 years experience as a writer and editor in the United States, Europe and Latin America. Bamrud has worked for various print, broadcast and online media, including Latin Trade, Reuters and UPI.