re: Two Views: Seybold & Laughlin (America's Network) on SMS
Andy into SIMS (not the plug-in).
>> Is Mobile Messaging Ready For Prime Time?
March 1, 2002
By: Kirk Laughlin
America's Network Weekly
More than a third of the domestic mobile subscriber population now has access to intercarrier short message service (SMS), finally nudging the cheap and globally adored data service into the limelight of the US wireless market.
Early bets among the operators with intercarrier capabilities — AT&T Wireless, Cingular and VoiceStream Wireless — are that SMS will help boost sagging revenues and, more lastingly, illicit a national fever for the first in a series of legitimate mobile data services.
The US population’s wealth and relative technically savvy could help make the country the most lucrative SMS market in the world. Expectations are that the service could grow by 50% each of the next several years, a pace that would not be that surprising given the precedents set by Asia and Europe.
European operators have offered SMS since the mid-1990s, helping worldwide SMS message transmissions to grow to more than 30 billion per month. Most of Asia and Australia have witnessed triple-digit surges in SMS, once intercarrier pacts were set in place.
Whether SMS attains its wildfire potential in the US is more immediately dependent on practical matters such as network performance, marketing and pricing.
In an ongoing measurement of SMS performance, done in cooperation with Keynote Wireless Perspective Services, America’s Network magazine has found less than earth-shattering results among the major service providers in cross-country tests.
In recent measurements (biweekly results can be found at www.americasnetwork.com), Keynote found an average availability percentage of 96% among the six major carriers. Average response times ranged from the leader, AT&T, with 6.5 seconds to dramatically slower performers Cingular (23.9 seconds) and VoiceStream (27.6 seconds).
Major carriers also kicked-off SMS marketing campaigns around the US Winter Olympics in an effort, some observers say, to jump-start interest in the youth segment. Pricing for SMS messages generally ranges between four cents and 10 cents.
Although this week’s announcements that VoiceStream and Cingular joined AT&T in carrying intercarrier traffic, a visible gap still remains in the SMS parade — major CDMA carriers Verizon Wireless and Sprint PCS have been silent on their interoperability intentions.
Without a unified front of operator solidarity, SMS may stumble out of the starting gate. "Cingular believes intercarrier messaging, which breaks down communication barriers between carriers, is essential to achieving mass adoption and increasing usage," said Stephen Krom, Cingular’s vice president of marketing and product development.
Sprint PCS likely will unveil a "short mail" messaging platform in the run-up to its CDMA-1x launch this summer. Other carriers have discussed plans for instant messaging platforms that would resemble SMS.
Carriers may be imagining that they are creating weapons for the mobile data world by building distinctions between messaging platforms. But, while the US market may be more technically developed that it was in pre-Internet days, the mobile population is still drawn to services for their convenience and simplicity.
Efforts to hyper-monetize the carrier-subscriber relationship may yield higher operating costs for overzealous operator too focused on the short-term gain. <<
Andy Seybold speaks:
>> Short Messaging Services in the United States
Andrew Seybold
Outlook 4Mobility
March 5, 2002
Wireless Short Messaging Services (SMS) have been used widely in Europe, Asia and other parts of the world for some time now. In December 2001, the number of SMS messages sent in Europe was in the billions. Clearly, SMS is a huge success where its offered, and provides a nice increase in revenue for wireless operators.
SMS is coming to the U.S. but I dont believe it will be nearly as popular here. Instant Messaging is well entrenched and the percentage of U.S. teens who have wireless phones, while growing, is far less than in other parts of the world.
SMS has been around long enough that teens who grew up with it have taken it to their corporate jobs. In other parts of the world, SMS is the one wireless technology that moved from the consumer space to the business space instead of the other way around.
As SMS begins rolling up on our shores, wireless operators are getting part of it right. They know they need to offer SMS across networks, not just on their own network. Lots of work has been done in the U.S. and Canada to ensure SMS interoperability across most of todays networks, but this isnt enough. We need to look at the differences between the U.S. and the rest of the world in order to understand why.
When SMS was first released in Europe and Japan, teenage wireless voice users took to it quickly and in large numbers. Most of these teens didnt have a computer at home or at school, Instant Messaging hadnt been introduced, and wireless network coverage in most other countries is far superior to ours. While we have more geography to cover, the main reason non-U.S. networks have better coverage is that they were first built by government-owned telecom organizations that didnt have to worry about a return on investment. They built out networks that over time provided coverage both indoors and out. With privatization and the introduction of competition, new wireless operators had no choice but to build out systems equal to or better than those already in service.
In the U.S., two cellular carriers per region had to fight for business and make a reasonable return on investment as quickly as possible. They built out their networks based upon 3-Watt mobile phones and provided coverage for major metropolitan areas and freeways first. Since wired telephone service is virtually free inside buildings, most carriers werent too concerned about in-building coverage. Now that this has become problematic, carriers are working to improve in-building coverage but it must be done quickly if wireless data is to be ubiquitous. We will probably never achieve total coverage.
The primary reason that I believe SMS will be slow to catch on, even with network interoperability, is that Instant Messaging is already being used by millions.
SMS Late To The U.S.
What is the difference between Instant Messaging and SMS? Most will answer that its buddy lists on IM systems that show whos online. But the main difference is that IM can be accessed from ANY computer with access to the Internet at home, at work, while on the road and even at airline clubs and kiosks. SMS is available only on wireless phones and only when within wireless coverage.
For messaging to be successful in the U.S., it must be usable on both our wireless devices and on any computer that might be nearby. SMS is part of the solution. IM is another part of the solution. Currently, they are incompatible.
AOL, Yahoo!, and Microsoft---the three largest IM players in the world---are working to make IM available on wireless devices, but they arent permitting their IM users to work across platforms. An AOL IM user cant talk to a Yahoo! IM user. Their network agreements are with only a few networks: AOL uses Sprint PCS, Cingular Interactive and most recently AT&T Wireless; Yahoo! uses Motient.
SMS and IM forces need to pool their resources and make IM and SMS work across all wireless networks and on any computer. If we want teenagers and younger employees of our corporations to jump on the SMS or IM bandwagon, we need to make it their first choice, not something they use only from a computer or only over a wireless network.
I propose SIMSthe marriage of SMS and Instant Messaging that would work across corporate platforms, AOL (including ICQ), Yahoo!, MSN and others. (My royalty fee for SIMS is reasonable!) It would work on desktops, laptops, BlackBerries, Palms and Handsprings as well as text-enabled phones. It would enable us to send and receive SIMS among our workgroup, customers and friends. And we would be able to send our SIMS contact information to each other just as we do our IM information today.
The Problems
Of course, there are problems with this approach. It isnt perfect. IM across the Internet from desktop to desktop is essentially free while SMS is a chargeable service. And AOL, believing if it lets the outside world in it will lose its differentiation, wants to protect its IM service from interlopers that would provide access to non-AOL users. On the technical end, someone would have to figure out how to convert IM and SMS addresses and build a database so we can communicate across platforms and networks.
I think the advantages certainly out-weigh the problems. If we want to attract the teen market, grow our installed base of users and move some of them to data services, what better way than to stitch together a world-class SIMS system that would introduce voice centric-users to the power of wireless data.
I think its reasonable to believe that SIMS users would understand that when theyre using the service wirelessly there would be a charge. As with any data service, once they get past the initial charge for SMS messages they would pay about $0.10 per message, which would come down over time. With mm02 in Europe, users can send an SMS message from their Genie Internet service to any wireless phone for free and SMS message rates are quite reasonable.
SMS is a killer application for wireless in the rest of the world but I dont believe it will be nearly as successful in the U.S. However, a combination of SMS and IM certainly could be. There are companies working on SIMS today, but we need it sooner rather than later, and we need it to work across all platforms, wired and wireless. Once this is accomplished, I think that with SIMS the industry would reach the subscriber levels being enjoyed by wireless operators in the rest of the world. <<
- Eric - |
