The mobile industry is focusing more and more on SMS as a major revenue source.
Operators, device manufacturers and software enablers alike have finally understood that promises of advanced applications in a few years won’t bring in data revenues now. Meanwhile, SMS messaging has taken off hugely. The GSM Association expects 200 billion text messages to be sent by consumers globally this year, bringing in huge revenues.
A prime example of how strategies are changing is the Vodafone/Vivendi-backed portal Vizzavi’s agreement with Finnish SMS portal Zed to provide its users with SMS services, having failed to attract enough WAP customers.
The recent GSMA/Openwave initiative to launch m-Services, a set of industry-wide guidelines about what consumers should expect from mobile data services, is another example. m-Services is based around ring tones, images and screensavers in the GPRS era – a long way from the hype of huge revenues from mobile audio and video streaming.
SMS’s largest advantage is its simplicity and straightforward billing, and with its successors EMS (enhanced messaging service) and MMS (multimedia messaging service) it has enormous potential in allowing users to create and share their own content – sending digital photos to friends or being involved in a group chat, for example. These applications are ideal for the cash-poor, technology-savvy youth segment that made SMS popular.
The main current drawback is that SMS is not a secure medium for transmitting sensitive data, and so is unsuitable for mBusiness or mBanking. However, several banks have incorporated SMS into their WAP offering – for example ABN Amro provides stock alerts via SMS to its online banking customers. SMS can also be used on pre-paid phones to alert customers when their credit runs out, providing a hot button facility to transfer funds from their bank to their mobile account. The Netherlands’ Postbank and mobile operator Telfort have already implemented this.
SMS will remain a force to reckon with in the 3G future, complementing WAP and other wireless data protocols, and providing a compelling niche application for sub-segments of the market, such as the youth community.
