Carriers weigh SMS interoperability

Mobile Internet solutions provider InfoSpace is hoping to leverage its presence among the major U.S. operators to introduce two-way short message service (SMS) capable of enabling text messaging interoperability across all wireless network flavors. But the technology will require carrier cooperation to make it a national success, and it's unknown whether carriers will work together to make that happen.

AT&T Wireless and Voice-Stream Wireless have launched two-way SMS services, and along with Sprint PCS they also have expanded their offerings to wireless messaging services. It seems they hope eventually to reach the level of SMS success achieved in Europe and Asia. The GSM Association estimates more than 50 billion SMS messages were sent worldwide during the first quarter, with more than 200 billion expected by the end of 2001.

Two-way SMS offerings have gained more ground in Europe in part because carriers adhere to the same standard. The U.S. wireless landscape might be different, but InfoSpace believes carriers are ready to take advantage of SMS.

“The reason it has been slow is that last year was all about wireless application protocol [WAP],” said Dave Mercer, chief SMS engineer for InfoSpace. “Now carriers realize a lot of value can be added by launching two-way [service]. Also, networks were only capable of handling one-way SMS for a long time.” InfoSpace already has one-way SMS relationships with AT&T, Verizon Wireless, Cingular Wireless and VoiceStream.

Unlike European wireless carriers, many domestic operators are used to dealing with multiple standards. InfoSpace believes it is one of the few companies that can help U.S. carriers transition to two-way SMS interoperability among wireless networks because of its established relationships with them.

“We believe our solution is superior because by maintaining a direct connection to carriers' [short messaging service centers], we are able to deliver a higher-quality user experience,” Mercer said.

Analysts believe InfoSpace's announcement earlier this month was significant because its SMS technology works across all networks. But to reach the level of success European carriers have had with SMS, analysts agree that U.S. carriers must open their networks to competitors.

The issue carriers must address is whether SMS technology is standing in the way of adoption or whether carriers are being protective of their networks.

“SMS is new and carriers are still trying to understand the opportunity,” said Roberta Wiggins, director of wireless mobile services at The Yankee Group. “They are under pressure to increase average data revenue per user and don't want to risk losing out on an opportunity. It is still early days for SMS, but they do want the similar experience as operators have had in Europe.”

John Hanson, analyst at Mercer Management Consulting, foresees the SMS interoperability issue being batted around for a while. InfoSpace's foray into SMS is a continued development in the wireless data space, he added. “We will see a lot of back and forth between platform and middleware providers as well as carriers,” he said. “All carriers would like to move forward, but they are resource constrained. Each solution — SMS and WAP — will compete in the marketplace for a while.”

InfoSpace also wants to help carriers offer differentiated two-way SMS offerings. “The services will be unique because they will be able to be delivered to almost any phone or device — not just those with WAP,” Mercer said. The company believes its connectivity into carriers' SMS gateways will allow it to provide advanced SMS-based offerings such as network-independent text messaging, voice provisioning, micropayments, ring tones, screensavers and interactive gaming, all of which could enable wireless carriers to incur new revenue from messaging.

“There are some compelling applications for SMS,” said Gene Signorini, an analyst at The Yankee Group. “SMS in some ways would be easier [than WAP] to monetize because it is on a message-by-message basis.”

Nonetheless, SMS and WAP are expected to remain staples in wireless carriers' networks.

“SMS sometimes is positioned as an alternative to WAP. We see the two as complementary and linked,” Mercer said. “Some applications might be better suited for SMS, while other more in-depth sessions are good with WAP.”

Poised for growth

Estimated number of SMS messages

Region	December 2001	December 2002
European Union	20.00	27.00
Eastern Europe	4.00	7.00
Other Europe	1.50	2.00
South America	4.00	7.00
North America	4.00	7.00
Middle East and India	1.00	2.00
Asia	5.65	10.00
Africa	0.35	0.45
Global	40.00	62.45
Source: Mobile Lifestreams