MMS Will Not Take Off Till 2004, Says Ovum

John Delaney, principal analyst at Ovum, said: “Although vast rewards will not be evident immediately, MMS will be one of the most important weapons in a 3G operator’s armoury of mass-market services. It will catalyse a market for services and associated content that Ovum estimates will be worth around $70 billion globally by 2007, with more growth still to come. Around $31 billion of this will come from person-to-person messaging, with a further $39 billion from the entertainment and information services that MMS will enable – machine-to-person messaging.”

“MMS will be an essential component of mobile operators’ revenue side business case for 2.5G and 3G networks, in addition to expanding the market for person-to-person mobile messaging.”

Delaney, however, is sceptical about the widely-touted view that MMS may be the long-sought ‘killer app’ of 3G mobile networks. “MMS provides operators with the tools they need to extend the success of text messaging into a wider range of person-to-person messaging services in 2.5G and 3G networks. In addition, it will enable new kinds of entertainment and information applications, as it greatly increases the scope for messaging-based application services, in terms of both functionality and content. But no-one should expect MMS to provide the complete solution to operators’ revenue woes.”

“There is a large hole in the business case for 3G networks, and a single, simple solution to this problem is so appealing an idea that it has become the Holy Grail for many mobile business planners. But it doesn’t exist: MMS is not a `killer-application’, and neither is anything else. 3G revenues need to be built up from a range of component services, and although MMS will provide some of the most important components, operators must not lose sight of the wider mobile data services context.”

Most mobile operators in western Europe are currently investigating or trialing MMS services. By April 2002, over 20 operators had announced firm plans to launch commercial MMS services by the end of the year including Norway’s Telenor and Vodafone`s German operator D2.

MMS adds to the messaging experience with pictures, graphics and audio clips. SMS has proved to be such a massive hit with mobile users operators hope that MMS will prove to be equally popular and even more lucrative. However, Delaney warns: “MMS does everything that SMS can, plus a lot more besides. But to consider MMS as a kind of ‘SMS on steroids’ can be a dangerously misleading idea. This is an easy idea for customers to understand, and can be an effective way to market services. But when it comes to providing MMS services, different business models will be needed. Operators will need to think very carefully about issues like service pricing, business agreements with other operators, business agreements with internet service providers and relationships with third-party content providers.”