SMS: Europe’s Smash Hit

From zero to 15 billion in just a year is phenomenal growth by anyone’s count. That’s the land-speed record for SMS sent over GSM wireless networks last December. Although this figure indicates a 5-fold increase in text messages generated every month by GSM subscribers in the past year, it’s but the tip of the expected iceberg.

The GSM Association predicts that by this December, monthly GSM SMS will hit the 25-billion mark, chalking up roughly 200 billion messages for 2001 (www.gsmworld.com). A GSM spokesman expects that new applications such as information services will further fuel adoption and usage.

Growth in many European markets continues to soar. In the United Kingdom, for example, customers generated 756 million text messages last December, representing a growth close to 300% compared to December 1999 figures. Germany racked up a staggering 1.8 billion SMS messages that same month.

Asia Pacific is experiencing rapid growth of SMS, particularly in countries such as Australia, China, Hong Kong and Singapore. In the Philippines, the introduction of free text-messaging services as part of the monthly subscription fee generated an impressive 18 million messages a day. Now, carriers have introduced a token text message charge to encourage “responsible text messaging,” although volumes continue to increase as the prepaid customer base grows.

This kind of traffic for networks is impressive, but the question is, can the United States copy and nurture the same uptake rate and growth? Perhaps, according to Bo Hedfors, Motorola executive vice president and president of the Global Telecom Solutions sector (visit #3521 or www.motorola.com). According to the Motorola exec, this widespread European embrace of SMS is due in large part to calling-party pays (CPP), prepaid and high-speed networks, all elements that the U.S. market hasn’t quite mastered yet.

Currently, U.S. subscribers don’t freely dole out their wireless phone numbers because they must pay to send and receive. The same would apply to SMS. Subscribers likely would be highly selective of messages sent as well as to whom they provided their contact information to receive messages.

Using the Internet as a model, consumers have embraced e-mail because messages are covered in their monthly fees. They can send and receive hundreds of e-mails for the cost of AOL and a telephone line. However, if suddenly they had to pay for each message, usage would plummet. This payment also would foster resentment when those same customers received all of those pesky pushed service messages from the ISP and its advertisers.

According to Dataquest, a unit of the Gartner Group (www.gartner.com), CPP could increase U.S. wireless revenue by 15% by 2005. However, that percentage was derived before the explosive success of SMS abroad and may actually be higher now figuring in a successful traffic generator.

Dataquest analysts don’t expect most major carriers to offer CPP service much before 2004. However, the service could begin to show up regionally in some areas by the end of the year. According to those analysts, CPP will boost usage at the low-usage end of the market as it increases carrier revenue. Dataquest identified the majority of the prepaid market and subscribers using less than 300 minutes a month as the key demographics for the low end of the market.

“By far the greatest usage of traffic continues to be generated by consumer applications,” said Rob Conway, GSM Association CEO. “Person-to-person messaging still creates high volumes of short-duration text-message traffic for operators, especially in the prepaid market.”

The variety of messages using SMS text is increasing in Europe in terms of content, market segment, age group and geography. Unified messaging and the arrival of mobile-Internet services means SMS will continue to be the primary alert mechanism for users to check and pick up their e-mail, fax or voice messages.

A huge number of SMS information-based services such as Web portals are being launched daily. In addition to basic m-commerce applications, corporate services, sports, financial, news and weather-based information services are now available, as well as ring-tone downloads and icon messaging. SMS chat rooms are appearing, and it’s now possible to participate in auctions, advertise, gamble, or receive jokes via SMS.

So where does CPP stand in the United States? Not close. Last October, CTIA filed reply comments supporting the FCC proposal to establish CPP service. However, since then, not much has happened.

More at the Show:
• Logica has unveiled a multimedia messaging demonstration, based on Logica Multimedia Messaging Service Center. This service offers end users the first taste of what the future holds with 3G services.

The Multimedia Messaging Service Center can provide carriers with a 3G service on a 2.5G network, today.

Based on a new messaging infrastructure platform, the Multimedia Messaging Service Center has been designed to bring a range of services available in the connected world: e-mail, fax, video and audio download and streaming, electronic postcard and animated graphics exchange.
Visit #623 or www.logica.com

• Comverse Network Systems has announced its 3G Intelligent Short Message Service Center (ISMSC). ISMSC provides scaleable capacity and open connectivity to the Web and SMS-based applications.

This openness also extends to GPRS, 3G, full IP connectivity and other emerging technologies. ISMSC capacity can be increased incrementally as needed to support next-generation SMS services, such as picture messaging and mobile transactions that enhance operator profitability and subscriber satisfaction. Using a distributed ISMSC architecture that operates across multiple sites in the network, Comverse enables SMS growth and scaleability in a way that is transparent to all users that access the system.

Operators can expand SMSC capabilities, deploy new applications and add capacity seamlessly.

Comverse also has announced Prepaid GPRS, a real-time billing and payment solution for providing prepaid mobile users with easy, online access to IP-network applications including Internet and corporate Intranet access, e-mail, location-based information services, mobile commerce, and infotainment services.
Visit # 855 or www.comversens.com

• Nokia has launched the Nokia Artuse MMS (Multimedia Messaging Service) Center, a high-capacity platform for the next wave of mobile messaging. The Nokia solution enables operators to introduce multimedia-messaging services combining new content such as audio and video clips, photographs and images with traditional text messaging.
Visit #2822 or www.nokia.com

• Openwave Systems’ IP-based Mobile Messaging Gateway allows carriers to deliver SMS messages more economically by leveraging an IP architecture.

The Openwave Mobile Messaging Gateway (MMG) enables wireless carriers to scale and enhance performance for short messaging more economically, while providing the flexibility to add new revenue-generating messaging services in the future. These may include applications such as mobile instant messaging and message notification.
Visit #6023 or www.openwave.com