re: Canadian Providers' Partnership A Move Toward SMS Interoperability
CMG single-vendor approach
SMS Players Market Share
CMG WDS 31.73%
Logica 27.71%
NTT DoCoMo 20.35%
Nokia 9.08%
Sema 5.86%
Comverse 2.99%
Motorola 1.43%
Ericsson 0.53%
ADC 0.30%
Hyde 0.01%
<>> B>Will U.S. Carriers Get The Message?
Deborah Méndez-Wilson
November 27, 2001
Wireless Week
wirelessweek.com
Canadians are known for breaking down language barriers. Soon they'll become technology polyglots, too, able to cross the various wireless protocols that have barred them from sending text messages to each other over mobile phones.
Bell Mobility, a CDMA carrier; Microcell Connexions, a GSM carrier; Rogers AT&T Wireless, a TDMA carrier; and Telus Mobility, a hybrid CDMA-iDEN carrier, recently announced an alliance to enable intercarrier short messaging service by early next year. The hope is that this interoperability partnership - the first in North America - will speed adoption of SMS in Canada and eventually the rest of the hemisphere. For now, though, major U.S. carriers, which are more focused on network upgrades, will watch from the sidelines to see whether SMS turns into the phenomenon here and in Canada that it has been in Europe and Asia.
Most U.S. carriers began introducing SMS last year. But network interoperability barriers have inhibited widespread adoption of the service. In Europe, where wireless carriers use a single network technology - GSM text messaging is hugely successful.
SMS devotees use their thumbs to deftly tap out messages on their digital phones, using chatroom-like abbreviations and emoticoms. The typical mobile text message costs a few pennies to send, but those pennies add up to big bucks for wireless service providers. In Scandinavia, for instance, some carriers report that SMS accounts for up to 25 percent of their annual revenue.
'That's a big chunk of revenue [North America carriers] are looking at that they are not getting today,' says Erik de Bueger, vice president of the North American offices of CMG Wireless Data Solutions, a London-based company that is providing the technology that will enable cross-carrier SMS in Canada.
No one can dispute the popularity of SMS in Europe and Asia. About three-quarters of a billion text messages flew between wireless handsets around the world every day in September, according to the GSM Association. In North America, however, where wireless networks evolved out of disparate technology standards, subscribers can send a text message only to another person on the same network. Critics argue that North American carriers have failed to educate consumers adequately about the benefits of SMS, and, until now, most carriers have been unwilling to solve the network interoperability issue, de Bueger says.
'This is the first time that four technologies have been bridged, that carriers get together to create an SMS platform over networks that are incompatible for data,' he says. 'I think it will put some pressure on the U.S. market.'
Linda Barrabee, messaging analyst with the Boston-based Yankee Group, agrees that while interoperability problems are the biggest roadblock to SMS in the United States, there are other factors as well. One is that U.S. consumers are more inclined to use personal computers to send e-mail or instant messages, and digital subscriber lines and other broadband technologies are connecting U.S. consumers to the Internet at increasing rates. In other parts of the globe, where PC penetration rates are lower, SMS has become the de facto way to send text messages, even if the technology limits them to 160 characters.
Here, America Online Inc., which has 61 million subscribers, wields so much influence that several major U.S. wireless carriers have partnered with the Internet service provider to deliver IM capabilities to their customers. 'I think that alone says something about where carriers see [the mobile text message] solutions heading,' Barrabee says.
But just because U.S. carriers seem more focused on IM, wireless e-mail and rolling out next-generation voice and data services doesn't mean they won't be watching the Canadian market's SMS experience. U.S. carriers might decide to band together on network interoperability in phases, with two or three agreeing to open up their networks for intercarrier SMS and others joining the partnership later, Barrabee says.
Patrice Peyret, CEO of the San Ramon, Calif.-based MobileWay Inc., another developer of wireless interoperability solutions, says his company has been in talks with several major U.S. carriers that are seeking network gateways that would enable intercarrier SMS capabilities.
But each carrier has approached his company independently, he says, a clear sign they are not yet working together on the interoperability issue.
In addition, several operators have revealed they are not yet ready for SMS interoperability because they still are integrating the disparate billing and other back-office systems acquired in recent mergers. Peyret predicts it could be another two years before the U.S. wireless market sees widespread intercarrier SMS offerings. Still, he applauds the Canadian agreement. 'It's probably going to snowball into the United States - I hope.'
The four partnering Canadian carriers chose a single vendor, CMG, which handles about 32 percent of the world's SMS traffic and half of Europe's, according to the company. Seven of the 10 largest GSM carriers use its technology, the company says.
But the single-vendor approach might not translate well to the United States, which has more players. In any case, CMG and MobileWay are not alone in their efforts to deliver network interoperability, customer care, billing and other carrier solutions. BulletIN.net, MessageMachines, Logica plc, MobileSpring Inc., Comverse Technology Inc., Motorola, Sema Group plc, ADC Telecommunication Inc., Hyde, Ericsson and Nokia also offer various solutions.
Some worry that SMS could fail in the United States if all carriers don't work together to ensure seamless, intercarrier delivery. A spokesman for Verizon Wireless, the nation's largest mobile carrier with more than 27 million voice and data customers, declined to estimate when the interoperability issue might be resolved. 'Right now a lot of the carriers are still trying to get their SMS services up and running,' says Verizon spokesman Jeffrey Nelson. 'That needs to be the focus industrywide.'
In the meantime, U.S. carriers will be keeping a close eye on the Canadian market for the better part of next year. <<
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