With the notable exception of SMS, mobile data services have failed to take off in Europe and operators will have to show the utmost patience in the quest for reliable revenue streams.
It is already acknowledged that prospects for 3G services remain bleak while the telecoms market remains in the doldrums (see
3G Burden Getting Heavier). Moreover, a new report from
InStat/MDR claims that newly launched messaging services such as Multimedia Message Service (MMS) and Instant Messaging (IM) will not reach double-digit penetration until 2006.
Simple text messaging has been an undoubted hit with mobile users but the study claims that SMS Mobile Originate (MO) message volume and revenue will peak in 2003, before declining to approximately $3 billion in 2007. This represents a five-year CAGR of -24% although SMS will retain top billing until 2006.
“Wireless IM, which provides a person’s presence availability for correspondence, has a real potential for SMS cannibalisation in Europe,” said Ken Hyers, a senior analyst with In-Stat/MDR. “However, while the demand for wireless e-mail, SMS and potentially, IM is clear, interest in new and future messaging services, such as Enhanced Messaging Service (EMS), is not.”
Network upgrades and improvements along with messaging friendly devices are seen as crucial to the success of the messaging industry and operators are, to a large degree, dependent on handset manufacturers to meet consumer demands.
There is growing feeling that MMS will ultimately prove lucrative (see Mobile Messaging Services To Bring In The Lucre) but for the time being, it seems to have the most potential among business people. The average tariff per message, in 2003, is approximately $0.40, and it will take until 2007 to drop to the more affordable rate of $0.17.
