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Recent messaging trends
By Declan O’Mahony, CCO, Jinny Software
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The use of SMS continues to be the messaging mainstay in many markets. Application messaging is experiencing a larger growth than traditional person-to-person messaging. As a result, operators are looking to how they can maximise revenue from Value Added Services. Application messaging, which includes all value added services (VAS) such as news, weather and stocks, is a growing business model for operators trying to ensure the continued use of SMS.
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In 2006 in India, revenue for mobile VAS applications such as ringtones and wallpaper downloads generated almost US$670 million. It is due to reach US$1 billion for 2008.
New applications are on the increase. For example, banking transaction services where the bank may confirm a customer transaction by sending an SMS. A popular service in China has been the lunar calendar. Each night subscribers to the service get sent a list of suggested favourable things to do the next day.
Although North America lags behind the rest of the world in terms of text messaging, it is starting to catch up. Recently a company in Colorado has set up a system whereby customers can pay their bills (in this case, in a restaurant), by text message.
It is such applications that will drive the rise in future SMS use.
Toll road payments
Toll road payments are already established in the UAE. Cars are fitted with an electronic tag which registers the car’s toll card number as it passes. Either the driver or the corporate account holder uploads credit by SMS. If the account is running low, SMS notification alert the driver.
Missed call notification
In the Middle East as a whole, voice mail traffic and usage is very low. People do not typically like to leave messages. In Africa, a substantial proportion of the population cannot afford to pay for phone calls. At the same time, missed call notification by SMS is very popular. For example, a switched-off phone which received a call will be notified by SMS once the handset is switched back on. Across the regions, most operators have already implemented missed-call notification systems. This seems to be both a regional and cultural preference.
Unified messaging
One worldwide trend which is starting to take off is unified messaging. It has been around for 10 years, but until now this messaging evolution has not taken hold. This is most likely because of the previous lack of internet connectivity. However, with these issues now addressed, it is an opportunity for the future. It can offer subscribers the ability to access and use all their messaging services. This includes email, SMS, voice mail and instant messaging (IM) on the one IM platform, which serves to unify the whole messaging system.
3G
The revenue mainstay continues to be from their established 2G and 2.5G network infrastructure and services. Leapfrogging 2G and 2.5G solutions straight to 3G+ technologies, which has been seen happening in many African countries, has not been seen to any great extent across the Middle East. Operators still see further revenue potential in their existing platforms. Maximising this before moving on seems to be a regional modus operandi.
In Latin America the adoption of advanced technologies such as 3G and the increasing demand for premium mobile content is driving revenue growth. However, mobile telephony in this region is still only at 65.5%. This points towards the existence of further opportunities.
Tariffs
The disparity between prepaid and postpaid tariffs in ME and Africa is not as extreme as in, say, Europe. However cultural and social differences in these regions, where the trials of life can be extreme, lead to mobile users preferring the flexibility of topping up rather than having a monthly charge.
Prepaid is extremely popular because of the flexibility it allows. Subscribers in the Middle East typically dislike monthly payment plans and uncertain charges. Subscribers in Africa may not have a regular income to enable them to pay bills on a monthly basis. They prefer to pay as they go, whether for a top-up, a standard mobile service, or the messaging and VAS features the network offers. In Latin America, the low-income social segments uptake of new prepaid plans and low-cost handsets is driving market expansion.
Ringback tones
A few networks have, however, had greater success with some VAS than with others. The relatively high uptake of ringback tones is one example. Those operators who have launched these and have offered a ‘charge-at-the-time-of-use’ option have been the most successful. In Syria, for example, ringback tone uptake has been extremely successful. This is partly because of marketing but also largely due to the simple pay-as-you-go strategy with only surcharged IVR calls. There is no monthly subscription, no automatic renewal and no web interface.
Traditional local ringtones are also very successful, together with personal tones, where the system plays the callers first name.
Message based advertising
Another method of driving VAS messaging on the increase as a marketing tool is that of message-based advertising. This is where sponsored content, in the form of advertisements, is attached to standard messaging including SMS, MMS, and WAP-based traffic. Operators can select advertisements to be appended to a message. These can be based on several criteria, including sender selection, message content based on keywords, or the user profiles of the sender or receiver.
Mobile users already account for 85% of all African telecom subscribers. The planned investment from the GSMA aims to increase mobile coverage from 75 to 90%. It is expected that there will be almost 352 million mobile subscribers in Africa by 2011. This will have a huge impact on how mobile phones are used. For example, already in Kenya, mobile phones are used to connect cyber cafes to the internet. Farmers use their phones to gain vital access via SMS to current crop price information. With almost continent-wide access to the mobile network, a huge opportunity for offering different mobile services becomes available.
The overall success and uptake of existing and new messaging services depends on many factors. Effective marketing by the operators can do much to help, as the success of a value added service such as corporate Ringback Tones highlights. Technological advances and upgrades by the operators will also be needed so that a full range of possible new-age messaging and VAS can be supported.
