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Wireless operators and their equipment suppliers will be praying for steady data service uptake in 2003
January 2, 2003
Let's start 2003 by wishing "Happy New Year" to everyone, and follow that up by hoping this will be a year of prosperity. We all need it.None need it more than the mobile operators of the world. They will be crossing their fingers, their legs, and anything else they can possibly manage, in the hope that investments made in the past year will result in new handset sales and the subsequent use of the new services, particularly picture messaging, enabled by those devices. And the software and hardware firms will be equally keen to see signs of success. Without it they're not going to see much action from system upgrades and extensions.While picture messaging, and indeed the transfer of video clips from phone to phone, may be nothing new in Japan and Korea, it is in its infancy in Europe – and nonexistent in North America, where simple text messaging has proved a headache in 2002. In Europe in particular, 2003 needs to be the year in which the operators – and the suppliers of handsets, software, and messaging gateways – see signs that wireless subscribers will make the move from text to picture messaging. A lot is riding on this transition, and while no one is expecting the volume of picture messages sent to be more than a few hundred million in 2003 (outside Japan and Korea - see Picture Progress) what everyone is counting on is sequential growth, month on month – which will not only generate revenues for the operators but lead to greater sales of MMS-enabled handsets, as consumers seek to join the picture messaging community they see growing around themHundreds of millions of picture messages? If you think that sounds too high, consider this: In 2002, the number of text (SMS – short message service) messages sent was set to be 360 billion, according to the GSM Association. And rising!The danger for those carriers looking to additional cashflow and a return on their GPRS and messaging infrastructure investments is that not all the pieces of the picture messaging jigsaw might be in place soon enough to make 2003 a transitional year. I say GPRS because we are largely talking about GSM territories here. The networks' data capabilities are well tried and tested, and there is a growing range of camera phones in the shops (see Looking Sharp and Live!y and The Nokia 7650 Imaging Phone), as well as specific bundled services, such as the Live! services launched in multiple territories by Vodafone Group plc (NYSE: VOD), to attract the eager consumer (see Vodafone Goes Live!).The crucial element is the ability to send a picture message from a cameraphone to any other cameraphone, particularly within a country. And this is something that is only just starting to be possible, amazingly (see Europe Gets the Picture). All the operators in the U.K., for example, offer picture messaging services, yet subscribers can only send pictures to others on the same network, or to someone's email address. The carriers say the commercial deals that will open up the cross-operator messaging floodgates will be signed early this year, yet every day's delay is another day of potential revenue and growth wasted. The success of such services relies heavily on so-called "viral marketing" – one person telling his friends about a great service and encouraging them to "join the club." Such recommendations will not be made until the early adopters find they consistently get a successful "message sent" alert when they try and send a picture to other mobile devices. This is exactly how SMS became such a big business: The catalyst for that service was giving people the ability to send a message successfully to anyone else. So while the operators could benefit from some good fortune this year, they need to pull their fingers out and help themselves by forcing through the commercial deals that will trigger internetwork picture messaging, before they'll have any worthwhile statistics to boast about. If they screw up, they'll need more than luck when they face their investors and shareholders.— Ray Le Maistre, European Editor, Unstrung
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