re: MMS in Asia
Singapore ... Hong Kong ... Philippines ... Malaysia .... China ...
>> The Next Big Thing?
Elizabeth Hall
EMC Cellular
Mobile Communications International
Issue 93
01 August 2002
Elizabeth Hall, senior research analyst at EMC, takes a look at the issues surrounding MMS and finds that some operators within Asia Pacific are diving straight into launching the application while others are taking a more cautious approach.
Neil Montefiore of Singapore's MobileOne (M1) recently raved about the uptake of GPRS, and "the movement from ears to eyes" that would be facilitated by MMS. With over seven per cent of M1's total subscriber base using GPRS at the end of June 2002, Montefiore has more reasons than most operators in the region to be optimistic about the prospects for MMS.
In Singapore a messaging culture is already firmly established among the majority of mobile users. M1 subscribers send on average over nine short messages each day, more than any other operator in the world.
MMS incompatibility between different makes of handset will be largely eliminated in Singapore because 95 per cent of the country's mobile subscribers use a Nokia handset. With the average handset replacement rate averaging somewhere between 12 to 18 months, the critical mass of handsets required to stimulate usage should therefore be achieved within a relatively short period. Montefiore predicts that the 20-25 per cent penetration rate of MMS handsets, hailed by many as the critical point when MMS usage will take-off, can be reached within nine to 12 months of service launch. M1 is scheduled to launch in September 2002 and SingTel, which is rumoured to be trialling MMS with Logica, is hot on M1's heels, with a scheduled launch date of sometime during Q3 2002.
In contrast to its larger rivals, Singapore's smallest operator, StarHub, has stated that it will not launch MMS services until the end of 2002 at the earliest because of a lack of MMS enabled handsets, and the numerous technical issues associated with the new application. Given the effect of the current economic slump on the uptake of colour handsets within Singapore, perhaps StarHub has decided that it will take more than hype and over-optimism to get the MMS handset sales rolling.
Meanwhile, in Hong Kong, cheap voice tariffs and the problems associated with Chinese text input have restricted the growth of a text messaging culture, and by extension SMS take-up. Local operator Peoples Phone has also, therefore, decided to hold back on MMS. CEO Charles Henshaw admitted recently that, although MMS should not be allowed to fail, "the uptake of GPRS had been a disappointment," because many obstacles still have to be overcome by operators and handset vendors before MMS could become a real revenue generator.
GSM operators worldwide are faced with a lack of common standards between manufacturers that could prevent MMS interoperability between the various handset vendors' products. Henshaw argues that MMS will only take off if operators are able to offer reasonably priced MMS terminals and compelling applications geared to the mass-market. Interoperability between MMS services is the key to that and needs to be addressed quickly. However, unlike SMS interconnection, which was late arriving in Hong Kong, Henshaw believes that the Hong Kong operators have learnt their lesson and will be keen to implement MMS interconnection quickly.
Peoples Phone will be keeping an eye out for lessons that can be learned from rivals CSL and Hutchison, which both launched MMS services in the first half of 2002. CSL and Hutchison's decision to opt for volume-based pricing and charging per message respectively, reflects the two distinct pricing strategies that are currently being offered to MMS subscribers in Europe.
A recent analysis by EMC on current MMS pricing concluded that billing per message is expected to dominate in the initial stages, albeit at different pricing levels depending on the variations in message size. In the long term a subscription-based model is likely to become more widespread as operators and content providers move to secure a predictable revenue stream from the service.
With the success of SMS in the Philippines, many within the industry expected Globe Telecom and Smart Communications to be among the first batch of operators to launch MMS. However, both operators have kept quiet during the first half of 2002 as to when they intend to launch the service.
Smart was rumoured to have teamed up with Nokia, but it was Globe Telecom which was the first Philippine operator to launch MMS, in mid-July to postpaid subscribers, for free, until the end of August 2002. At the end of the free promotion, charges for the MMS service will reportedly be based on a combination of fixed per-message rates and the size of the message. Globe Telecom has been working with Ericsson and over 100 content providers for over two years to develop MMS services. The new service includes Traffic-Cam, an MMS application that allows subscribers to view real-time traffic pictures. And, as well as the standard photo message service, Walt Disney animated pictures and ringtones are also available.
But for the moment Globe and Smart will not be getting too excited about the revenue potential of MMS as prepaid subscribers account for 91 per cent and 97 per cent of their total subscriber bases respectively. As prepaid GPRS is not yet widely available, both operators are faced with the problem of only being able to charge less than ten per cent of their subscriber base for an unproven application.
Even with the introduction of prepaid GPRS, the success of MMS in the capital of text messaging will depend heavily on MMS-enabled handsets being offered at affordable prices and MMS tariffs having mass-market appeal. Handsets are already heavily subsidised in the Philippines and subscribers will be expecting MMS handsets to fall into the same category.
With Filipinos used to a fixed low-cost SMS charge, ranging from one peso for a simple text message to 20 pesos for a value-added SMS, the Philippine operators may find it hard to convince the average user to look beyond SMS to MMS, while making money on the new services at the same time.
Per-message charges as opposed to monthly plans are expected to dominate the pricing strategies of both operators in the Philippines. However, Globe Telecom believes that subscribers are ready to accept price differentiation between different MMS services. Subscribers are already able to distinguish between regular text and premium SMS content and Globe Telecom argues that the same will be true of MMS.
Meanwhile, in Thailand, Advanced Info Services (AIS) is already well on its way to launching MMS, scheduled for sometime during Q3 2002. According to a Comverse spokesperson, AIS's decision to launch the service quickly is largely due to the ability of MMS over GPRS to overcome the Thai language barrier, which has limited SMS take up in Thailand.
In Malaysia, TimeCel, the smallest operator in terms of market share, has become the first Malaysian operator to publicly announce an MMS trial.
Recalling its December 2000 GPRS launch - at a time when there was a pronounced lack of GPRS handsets anywhere in the world - TimeCel intends to be the first to market with a service it cannot sell. TimeCel's figure of only 500 GPRS users at the end of June 2002 reinforces the view that a lack of MMS handsets and their high cost when they do become available means the popularity of MMS will be a long time coming in Malaysia.
However, one country where the potential for MMS is undoubtedly huge is China. The number of short messages sent by China Mobile's subscribers alone is set to reach a mighty 50 billion for 2002. China Mobile is rumoured to be planning its MMS campaign for September or October of this year.
The world's largest operator is reported to have completed testing MMS services with Nokia and Ericsson with the focus on animated e-cards with musical accompaniment. But again, the uptake of MMS in China, like elsewhere in Asia Pacific, will ultimately come down to how much it will cost to use and how far the price of a good quality MMS handset is able to fall. <<
- Eric - |
