Mobile operators are being optimistic if they expect multimedia messaging services (MMS) to be the elixir for the ills of the industry, says a new study by market researchers Datamonitor.
The success of short message service (SMS) text messaging has encouraged operators to invest heavily in MMS and it is hoped that mobile data services will account for between 25 and 30% of revenues by 2005.
The report claims that although MMS will begin to erode revenues from SMS this year, margins on the newer service are lower and telecoms companies may have to find other sources of profit. The European MMS market is expected to grow at a compound annual growth rate of 388% over the next four years but will still only be worth $4.9 billion by the end of 2006.
The shortfall could be made up by a surge in demand for email and instant messaging and there is potential for infotainment, multimedia downloads, payments, location-based services and mobile gaming. However, Datamonitor says that consumers currently regard lightweight phones and long lasting batteries as being more desirable than data servies and multimedia messaging.
All in all, the report offers little encouragement to UK mobile operators who are yet to see a return on their 3G investments and were left reeling by Oftel’s recent decision to impose a 15% cut in termination charges.
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