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To: ms.smartest.person who wrote (636)	3/22/2001 11:49:24 PM
From: ms.smartest.person	Read Replies (1) \| Respond to of 2248

The Short Answer- Mobile messaging starts slowly in Hong Kong By JEREMY HANSEN Photo illustration by Emilio Rivera III. Add Rebecca Fyfe of the UK to the list of people who owe their lives to their mobile phones. Fyfe and a group of fellow boaters were rescued last month after drifting for two days in a broken-down vessel in stormy Indonesian waters. Fyfe used her handset to peck out an SOS text message that was relayed to her boyfriend in London. Her cry for help set off a chain of events that eventually resulted in a search-and-rescue mission by the Indonesian navy. Fyfe should be thankful she wasn't stranded at sea off Hong Kong Island. Her message might never have gotten through. Despite Hong Kong's reputation as a wireless communications paradise where more than three out of four people own cellphones, the city is surprisingly backward when it comes to data exchange on mobile handsets. Citizens have ignored glitch-prone WAP phones since wireless Internet access services were introduced last year. Meanwhile, an older technology called SMS (for short-messaging services) is available but is limited mainly to advertising. Hong Kong's cellphone carriers won't disclose how many of their customers use mobile data, most likely because they don't want to call attention to their comparatively weak showing. "If text messaging was extremely popular, they would talk about it," says Agnes Ho, vice president of Asian telecoms equity research at Merrill Lynch. There are several reasons why mobile messaging has been slow to catch on in Hong Kong. For one thing, punching Chinese characters on cellphone keypads is awkward. But the main reason, say analysts, is that the SAR's six highly competitive mobile-phone companies won't exchange each other's data traffic. The situation limits SMS from the consumer's perspective. Imagine how popular e-mail would be if digital correspondence could not travel beyond the bounds of local Internet service providers. "SMS seemed kind of cool at first," says Benedict Ma, a local property analyst. "But not being able to send it across different networks kind of defeats the whole purpose." The inability of carriers to reach a message-sharing accord may mean they are forgoing a significant revenue source at a time when price wars have driven takings from voice calls down by more than 50% in two years. Mobile text-messaging is exploding globally. The GSM Association, an international industry trade group, predicts 200 billion SMS messages will be transmitted worldwide this year. In the Philippines, where sending a 160-character message is cheaper than making a voice call, citizens exchange about a billion SMS messages every month. Philippine mobile company Globe reported 14% of its revenue in the first half of 2000 came from text messaging. In Europe, where carriers report data revenues contribute up to 10% of total sales, SMS is also called Significant Money Stream. However, Hong Kong carriers may not reap the same rewards should they rally behind SMS. Competition keeps a lid on service fees. Per-message prices in the SAR are already falling toward uneconomic levels. Some companies are charging just one cent per message, down from 12 cents last year. Developed in 1994, SMS is also viewed as a handicapped technology about to be eclipsed by high-speed, Internet-based transmission systems. Why spend scarce capital expanding pager-like SMS networks when more capable 2.5G and 3G transmission technologies are on the horizon, promising applications such as mobile video-gaming and music? Hong Kong is slated to issue licenses for 3G networks later this year. Under the circumstances, SMS is "something that probably won't attract a lot of revenue," says Andrew Chetham, a senior telecommunications and Internet analyst at Gartner. Says Lehman Brothers' analyst Peter Milliken: "SMS isn't the savior of mobile-phone companies." Some carriers are seeking salvation elsewhere. NTT DoCoMo, Japan's largest mobile phone operator and a stakeholder in Hong Kong's Hutchinson cellular carrier, is expected to bring its successful iMode service to the SAR in the next few months. Third-party mobile-messaging companies are also preparing to enter the market with e-mail systems for cellphones. Still, it's anyone's guess how quickly broadband wireless networks will catch on. Some analysts are saying that fully operational 3G systems, once expected to launch in Hong Kong next year, may now be delayed until 2005. Faced with a mobile data generation gap, cash-strapped carriers may opt to improve their SMS offerings to tide them over until 3G applications and technologies are more proven. Meanwhile, text-messaging is growing despite shortcomings. Charles Henshaw, CEO of People's Phone, says messages among his 470,000 subscribers have doubled since last year. Hubert Ng, CEO of CSL, the mobile-phone company formed by a joint venture between Australia's Telstra and Hong Kong's Pacific Century CyberWorks, is predicting an increase in message traffic of up to 200%. That will happen only if carriers can set aside their differences and sign an inter-operator agreement — an outcome that could occur as early as next month. Cellphone companies "really need to find a way to demonstrate to investors that they are diversifying" their revenue bases, says Ho, the Merrill Lynch analyst. The short answer may be SMS. asiaweek.com