Oct 13, 2003 12:00 PM,

BEYOND PHOTOPLAY: AN MMS REVOLUTION

By Dan O'Shea

The multimedia messaging service era is just beginning, but it's already created a monster. That monster is mobile blogging (m-blogging or moblogging to some). Right now, it's a pretty small monster, but in the coming years, it has potential to wreak havoc on everything from carriers' marketing plans to their billing systems.

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The power of its threat is that when groups of users employ their wireless phones to coordinate collective activities — an application that may not have been imagined by the carriers themselves — the industry will have to learn to respond quickly, with new pricing structures, promotional strategies, service reliability guarantees and network management gymnastics.

“Mobile blogging can create a lot of new service options,” said Eric Anderson, vice president of practice development at Ericsson USA. “It's almost like the network operator is not 100% in control of what hits their network anymore. Blogging users can use the phone in ways we hadn't thought about, allowing those small groups of users to be great influences.”

As such users initiate applications or events that can also be revenue opportunities for carriers and content developers, their actions effectively could turn the tables on the traditional “inside-out marketing push” that carriers rely on to roll out new services, Anderson said. “Users will drive applications that carriers will have to learn how to market — an outside-in approach to marketing and pricing,” he said.

Anderson and others believe that carriers still have some time to ready themselves for this — dare we say — paradigm shift. While multimedia messaging service, or MMS, is most advanced in Asia, with video messaging a regularity, and quickly advancing in Europe, it's still primarily defined in the U.S. by the exchange of photo messages.

That's not to say that the market for pure photo messaging is small potatoes. This past summer, Verizon Wireless reported that in the first three weeks its picture messaging service was available, its users exchanged 1 million photos.

Sprint PCS also has led a spike in the purchase and usage of camera phones. But whereas these devices and services were once thought to appeal only to far-flung families that wanted to share photos, they are being bought up by the general public at a healthy pace, and being used in different ways.

During the New York City blackout this summer, for example, mobile bloggers became photo journalists, snapping shots of throngs of New Yorkers walking over the Brooklyn Bridge and suffering through the heat without air conditioning. They relayed their photos to moblog Web sites and news outlets around the country.

Still, the real exploitation of MMS network capabilities, devices and services in the U.S. market is yet to come, as companies continue to innovate in the areas of video and audio content, content-to-person messaging, multicasting, over-the-air updates, presence management and others. Operationally, carriers will have to adapt to these innovations as they become increasingly available.

“Billing systems are evolving, but there will be more complex billing arrangements with MMS,” said Andrea Basso, architect at NMS Communications. “There will be complex revenue-sharing relationships between carriers and many content developers.”

Corey Bowman, director of business development at Ericsson's systems integration division, said standards for MMS billing handoffs don't exist and that whatever handoffs carriers are doing now are based on ad hoc decisions.

“MMS revenue sharing is currently on a bill-and-keep model,” Bowman said. “This is to the advantage of some carriers, but they all want a more refined model.”

In addition, the complexities of revenue-sharing pricing models will change with service innovations.

“Why couldn't you have ‘sending party pays’ for MMS billing?” Anderson said. “Retailers could buy buckets of data from carriers and create promotions they can multicast to their customers. If carriers have prepaid capabilities for data, that's something they can look into today.”

These billing and pricing issues aren't holding up the progress of MMS now, but operationally, carriers may have to be ready to change models quickly as customers begin to express more specific demands and expectations of the service.

More intensive MMS usage and bandwidth-eating applications also will prompt new approaches to both mobile network management and network security.

“You don't really need an SLA for a photo message, but you need one for video to put value into the service,” Basso said. “If you don't meet quality requirements for video, it could lose its appeal, so network management becomes more complicated when you move beyond a simple photo exchange. Security also becomes an issue in peer-to-peer video messaging, because there may be content the user doesn't want someone else to see.”

Alan Pritchard, vice president of global marketing at Nortel Networks, added, “The reliability of messaging is important because you don't want this to be just the bastion of kids. People won't pay for browsing, but they will pay for MMS. It could be how mobile makes the next leap toward real interactivity and wireline replacement.”

To be ready for that revolution, carriers need to take stock of what they have and what they need to support future growth in MMS. Anderson said carriers have to use a checklist approach to think about what happens after the box goes in the network. “What do you do to grow the service?” he said.

Getting into a new frame of mind about marketing MMS and molding operations and network management to support new services is only part of the equation that must be mastered for a step-wise MMS evolution. Technical issues such as interoperability need to progress further.

Currently, short message service centers offered by companies such as Comverse and Logica/CMG play a major role in serving up different kinds of SMS applications. They also foster service layer inter-carrier interoperability for SMS, one of the factors in the service's late-blooming but solid success in the U.S. market during the last year. Multimedia message service centers from the same companies can now support a wide variety of MMS content and applications, and enable inter-carrier MMS. But, carriers have to be willing to test and offer that capability to their users, and agree on how billing hand-offs will be handled, Nortel's Pritchard said.

Because of the technology gaps that persist in the U.S. market — and increasingly in other parts of the world as CDMA networks grow in Asia and Latin America — inter-network capabilities also could be critical to the future growth of MMS.

Earlier this year, Qualcomm and Rocketmobile successfully sent a photo between a Verizon Wireless CDMA phone in New York City and a T-Mobile GSM phone in Paris, using Qualcomm's BREW application layer and Rocketmobile's RocketMMS client.

“That is the ideal global world, and what MMS usage should be all about,” said Peggy Johnson, president of Qualcomm's Internet Services division. “You can do it today.”

Yet, for now, that level of MMS interoperability remains a work in progress, largely the fodder of standards committees that are trying to establish exactly how the inter-network handoffs would work. “There's an understanding in the industry that we will see broad interoperability by about 2006 or 2007,” said Basso of NMS.

Still, Ericsson's Bowman said complete interoperability is not so much a technical issue as it is a business and operational issue. “MMS is neutral to air access type,” he said. “You have to get down to what the business rational is for doing interoperability. Carriers have to decide what kind of business arrangements they will have with each other.”

Nortel's Pritchard agreed with that sentiment. “There are no network hurdles. Interoperability shouldn't be an obstacle. The only way MMS will be successful is with carrier cooperation.”