To: Stock Farmer who wrote (120158 ) 6/11/2002 11:39:46 AM From: waitwatchwander Respond to of 152472 T-Mobile set for price war Picture messages to bring Christmas cheer Richard Wray Thursday June 6, 2002 The Guardian T-Mobile, the mobile phone network owned by Deutsche Telekom, yesterday raised the prospect of a price war in the UK this Christmas as it launched the UK's first wireless picture messaging service. The ability to take pictures using a mobile phone and send them to other phones or a PC is seen as a crucial first step towards customer take-up of 3G technology, on which the mobile operators have already spent billions. The wireless industry hopes that picture messaging - known as multimedia messaging or MMS - will one day become as successful as text messaging and yesterday T-Mobile UK's chief sales and marketing officer, Clent Richardson, said it is likely to be a battleground for pricing. "I have heard a lot of talk in the industry about strong pricing at Christmas and we are ready," he said. "Bring it on." The four UK networks - O2, Orange, T-Mobile and Vodafone - all plan to have picture messaging services up and running in time for Christmas. There will also be a new name on the scene, Hutchison 3G, which plans to launch its services later this year. The handset industry is experiencing one of the worst slumps in its relatively short history because of the decision by mobile phone companies to stop subsidising the sale of cheap handsets. Although prices of handsets that can take pictures are unlikely to fall to the sort of levels seen for pre-paid voice handsets a few years ago, the indications are that subsidies are back. T-Mobile, formerly One2One, yesterday said it is subsidising handsets for its £20-a-month picture messaging service by almost £180, bringing the cost of its first picture phone - SonyEricsson's T68i and snap-on camera - down to £199. "By the end of the year we think tens of thousands of people will be using the service," said Mr Richardson. T-Mobile yesterday demonstrated its picture messaging technology and in true Tomorrow's World style it failed to work because of a software problem. Within an hour, however, the glitch was removed and T-Mobile is confident that picture messaging will be a big draw for consumers. The industry is keen not to repeat the fiasco surrounding the launch of WAP, which was billed as the internet on mobile phones but was a consumer turn-off. Industry research house Ovum estimates that mobile users in the UK will send over 35 billion multimedia messages during 2007 and reckons the market by then will be worth over $5bn (£3.4bn). Riccardo Ottolenghi, Ovum's wireless analyst, said he expects the market to be hotly contested. "I think picture messaging is going to be fairly big - the only barrier is the price of the handsets. They are very, very expensive at the moment and consumers, especially in the UK, are used to getting things cheaper. "Our market research, however, shows people to be quite insensitive to the cost of messaging itself so the operators should be able to recoup the handset subsidies by charging for the service." guardian.co.uk