The mobile industry of late has unveiled plans to bring IM (Instant Messaging) to cell phones later this year to tap a new source of revenues and build on the success of text messaging.
Fifteen of the world’s top mobile operators, including Vodafone, Orange, T-Mobile, Telefonica and China Mobile announced plans to roll out PC-type instant messaging services initially targeting some 700 million mobile users.
Robert Conway, CEO of the GSM Association, said interoperable messaging is a landmark for the associations’ members and will provide a blueprint for the launch of other mobile services.
The operators have agreed to charge mobile IM users for outgoing messages but incoming messages will be free. According to Arun Sarin, CEO of Vodafone, this will cut down on unwanted messages being sent to consumers’ mobile phones.
The operators did not give pricing details when announcing the industry-wide initiative at the 3GSM mobile technology fair in Barcelona.
There will be fewer viruses and less spam than on many Internet-based services, he said.
Industry officials said the targeted user base would be much larger when other operators signed up to the initiative, which is expected to use open standards and work across networks, with pretty much the same features as computer-based messaging.
Instant messaging is a new opportunity for the mobile industry to grow its data revenues, said T-Mobile Chief Executive Rene Obermann, adding that he did not think the planned service would eat into operators’ existing text messaging revenues.
"IM is chattier, SMS [text messaging] is fire and forget–Messaging will trigger more messaging," Obermann said. T-Mobile, a Deutsche Telekom unit, plans to launch the service in Germany this year.
Mobile operators have so far struggled to increase data revenues from areas other than text messaging, and new third generation (3G) mobile services such as video-calling and high-speed Web browsing are yet to provide a significant increase in data revenues.
SMS Still Supreme:
Text messaging remains by far the biggest source of data revenue for mobile operators, but the industry believes instant messaging would build on its success by adding features such as presence information, instant delivery and the ability to track a whole conversation.
"The mobile franchise is the biggest in the world with 2 billion customers," said Sarin, referring to the market potential for the new service.
Traditionally, operators have been loath to push services such as mobile IM and e-mail, fearing it would cannibalize lucrative SMS (Short Message Service) messaging. Obermann, head of T-Mobile, denied such suggestions. "Overall, we believe it will increase data usage," he said.
Vodafone and rival France Telecom’s mobile unit, Orange, separately announced that they were close to an agreement for instant messaging interoperability across their networks, and were seeking support from other operators and Internet service providers to adopt the same to stimulate customer demand.
Industry officials said instant messaging would be popular in countries like India and China with low computer penetration but a growing mobile population.
The mobile operator’s push for instant messaging could also prove music to the ears of mobile handset makers, allowing them to produce and sell a new range of phones if the service takes root in the mobile industry.
The question of Internet service providers and Web IM operators could also serve to stymie the sharing. While some operators that sell broadband access and mobile subscriptions–such as France Telecom, which owns both Orange and Wanadoo–will be able to make their PC- and mobile-based offerings interoperable, other Net players such as Microsoft’s MSN have not joined the initiative, despite overtures from the operators.
According to Mark Newman, chief research officer at analyst house Informa, the conspicuous absence of Web-based IM companies will prove a hurdle in driving mobile IM take-up. If you do not have MSN and mobile IM, where is your marketplace? You have got to take a PC-centric view of the universe, he said.
While the operators believe that the service will be a hit with the youth market, Newman added there was "no chance" such consumers will shun free Internet-based services for their mobile counterparts. "It is too little, too late," he said.
However, the interoperable IM dream will take some time to come to fruition, as currently only high-end phones such as those running on Microsoft or Symbian will be able to use the service. It will be on most handsets bought next year, according to the operators, although some handsets now in circulation would not be able to be upgraded at all.
We want to ensure that all devices are IM compatible, not just the high-end phones, said Orange Chief Executive Sanjiv Ahuja.