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Mobile Messaging: Who Is Driving it and What Should Operators Do to Ensure Success?
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Description: |
Mobile messaging is fast becoming a mass consumer service due to several factors, such as increased awareness, new applications, and cross-carrier interoperability. The report, “Mobile Messaging: Who Is Driving it and What Should Operators Do to Ensure Success?” looks at emerging trends in this evolving market, and examines what vendors and operators need to do to remain on top of the growth curve. The report provides six-year user and message forecasts broken down by messaging technologies.
Mobile Messaging: WHO IS Driving IT AND What Should Operators DO To Ensure Success?
Executive Summary
1.1 Overview
The industry wide commoditization of voice and the massive increase in competition is driving mobile operators to introduce new and unique services in order to reduce churn and increase revenue. Over the past few years, Short Message Service (SMS) has become a huge success on operator networks, particularly in Europe and Japan. The massive uptake of SMS in several regions has caused many successor messaging services, such as Smart Messaging and Enhanced Messaging Service (EMS), to emerge and take center stage as promising revenue drivers. Fierce competition exists among a number of vendors for the supply of infrastructure for SMS and its more advanced successor technologies.
Smart Messaging and EMS are superior alternatives to SMS that, like SMS, use signaling channels, and have been categorized by Telecom Trends International (TTI) as Advanced SMS (SMS). To distinguish traditional SMS from A-sms, TTI has coined the term Basic SMS (B-sms) for 160-character messaging.
To tap into the revenue stream that messaging has the potential of generating, mobile operators have developed strategies that encompass alliance building, applications development, and creation of value-added services. These operators are depending on the messaging services, and their value-added applications, to add revenue to their decreasing Arpus.
During 2002, several operators launched Multimedia Messaging Service (MMS) as carriers began shipping handsets in significant quantities to support the service. MMS which uses traffic channels of packet-switched networks is being deployed over Gprs, cdma2000 1X and other 2.5/3G networks that are rolled out by the carriers.
While MMS offers the highest potential as a revenue generator, operators are able to use A-sms technologies to test the waters for new applications. Value-added services in the form of Mobile Instant Messaging (mIM) and Unified Messaging (UM) are making their way into carrier networks. While UM will remain a niche application for sometime, mIM is emerging as a mainstreaming offering.
Cross-carrier messaging is another significant trend, providing users the ability to send and receive messages to other carriers’ customers, regardless of the technology they use. Wireless carriers are offering messaging interoperability to help prevent churn and to lure new customers.
1.2 Questions Addressed by This Study
The questions addressed by this study include the following:
What are carrier strategies and approaches with respect to deployment of messaging solutions?
Which messaging solutions will be more successful and why?
What will be the number of users by region for B-sms, A-sms, and MMS over the next six years?
How many messages will be sent by region over B-sms, A-sms, and MMS networks during the next five years?
What are the regional trends with respect to adoption of various messaging solutions? What are the major drivers of these trends?
What are the decision drivers that affect wireless operators’ choice of messaging vendors?
This study attempts to answers these questions and more in order to provide insights into the promise of the growing mobile messaging market.
1.3 Key Findings
The following are the key findings of the study:
By year-end 2002, there were 580.2 million mobile messaging users globally. These users sent 430.8 billion messages during the year. The number of messages will grow faster than the number of users during the forecast period of this report.
MMS is on a fast growth track, thanks to a flurry of contracts signed by Ericsson and Nokia. Globally, MMS messages will grow at a compound annual growth rate (Cagr) of 154.8 percent over the next six years.
B-sms will gradually be replaced by A-sms for most messaging applications, growing at a Cagr of only 12.2 percent. A-sms which will grow at a Cagr of 132.7 percent
In terms of the messaging traffic, MMS will remain behind B-sms and A-sms during the forecast period of this report. Thus:
As Figure 1 shows, B-sms accounted for 95 percent of messaging traffic, followed by A-sms with 4 percent, and MMS with 1 percent in 2002.
As Figure 2 shows, A-sms will account for 38 percent of the users, followed by B-sms with 34 percent of the users, and MMS with 28 percent of the users by 2008.
Wireless operators’ decision-drivers for messaging solutions vary from region to region. Thus:
Operators in Europe are more concerned about the ability to reuse a messaging platform as well as the deployment time.
Operators in Asia (not including Japan and South Korea) are more concerned with price and scalability.
Canada and US operators are concerned primarily with the track record of the messaging providers and a marketing commitment from the vendors to assist the operators.
Japan and South Korea are more focused on technology choices, customization capability, and the availability of value-added services.
Caribbean and Latin American operators have concerns that are similar to Canada and US operators however, price is a larger decision factor.
Scope and Methodology
1.1 Scope
This report, “Mobile Messaging: Who is Driving It and What Should the Operators Do to Ensure Success,” explores the global mobile messaging market and operator strategies in this space. Because of the multiplicity of messaging solutions, TTI has created a new messaging category, Advanced SMS (or A-sms), to distinguish it from the traditional text-based SMS which it calls Basic SMS (or B-sms). A-sms, which allows for transmission of ring-tones and images over control channels, encompasses technologies such as Smart Messaging and Enhanced Messaging Service (EMS). However, when the term SMS is used by TTI, it includes both B-sms and A-sms.
Besides B-sms and A-sms, this report covers MMS. A-sms and MMS are the mobile messaging technologies that TTI expects will lead the market, thus the report places greater emphasis on them. TTI defines a user of a messaging service as one who uses the service at least once every month.
Topics covered in the report include:
Market trends: Discussion of global and regional trends with respect to mobile messaging, and examination of marketplace developments
Vendor decision-drivers: Discussion of criteria used by operators in evaluating vendors, factors affecting carrier spending, and specific regional needs of operators
Carrier deployment and strategies: Discussion of mobile messaging solutions with respect to their deployment and success in various regions, as well as an analysis of operator pricing
Market statistics: Statistics relating to messaging subscribers, regional subscriber usage uptake and volumes of messages forecasts covering B-sms, A-sms, and MMS users and messages
1.2 Additional Information Relating to This Topic
In order to provide a comprehensive understanding the capabilities for mobile messaging solutions and the global climate for their adoption, TTI has launched the following five reports:
1. Mobile Messaging: Who is Driving It and What Should the Operators Do to Ensure Success
2. Mobile Messaging: Operator Revenue and Investment Analysis
3. Mobile Messaging: Which Technologies and Applications Will Succeed?
4. Mobile Messaging: Vendor Strategies and Profiles
5. Mobile Messaging: Stats Book
This report is the first in the series. Professional consulting services and analyst time is available for additional briefings, research, and analysis.
1.3 Methodology
The information presented in this report stems from numerous in-depth interviews, extensive research into mobile wireless messaging markets, and analysis of market trends and developments. In addition, the author performed analysis and modeling using up-to-date data supplemented by information collected by TTI for other studies on mobile wireless markets. In particular, the research tools used in this report include:
1. Vendor Interviews: Interviews with vendors who are marketing hardware and software into the messaging component of mobile wireless networks provided insight into pricing and deployment trends.
2. Carrier Interviews: Interviews with national and regional mobile carriers provided primary insight into investment strategies and deployment timings.
3. Trend Tracking. Since TTI continuously tracks trends for the entire mobile messaging market, the report was able to put in context the uptake of messaging technologies across regions.
4. Global Subscriber Forecasts. Based on TTI’s work in modeling mobile wireless subscribers combined with historical and predicted wireless subscriber penetration, the magnitude of mobile wireless messaging uptake was assessed both by regions and technologies.
5. Mobile Wireless Messaging Pricing. Based on vendor financials and pricing information gathered through industry profiling, comparative cost structures were built for software and hardware investments for all three messaging technologies.
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Contents: |
1 EXECUTIVE SUMMARY 11
1.1 Overview 11
1.2 Questions Addressed by This Study 12
1.3 Key Findings 13
2 SCOPE AND METHODOLOGY 15
2.1 Scope 15
2.2 Additional Information Relating to This Topic 16
2.3 Methodology 16
3 GLOBAL MARKET DYNAMICS 17
3.1 Market Trends 17
3.1.1 Messaging Driving Operator Revenue 17
3.1.2 Interoperability Driving B-SMS 17
3.1.3 What Is Needed for MMS to Succeed? 18
3.1.4 Mobile Instant Messaging Enters Mainstream 18
3.2 Factors Affecting Carrier Spending 19
3.2.1 Carrier Capital Expenditure Drivers 19
3.2.2 Capital Expenditure Inhibitors 20
3.3 Global Market Forecasts 20
3.3.1 User Forecasts 20
3.3.2 Message Forecasts 20
4 VENDOR DECISION-DRIVERS 23
4.1 Vendor Evaluation Parameters 23
4.1.1 Product Features 23
4.1.2 Company Credentials 25
4.1.3 Marketing and Sales 26
4.2 Vendor Positioning 27
4.2.1 Positioning Matrix 27
4.2.2 Regional Positioning 28
4.3 Operator Pricing 30
4.3.1 Pricing Options 30
4.3.2 Pricing Strategies 31
5 CANADA AND US 33
5.1 Market Overview 33
5.2 Market Trends 33
5.2.1 Introduction of MO-SMS 33
5.2.2 Interoperability Propells Messaging 34
5.2.3 Role of Wireline Messaging 34
5.2.4 Picture Messaging and MMS Launched 34
5.2.5 Innovative Applications to Boost Messaging 35
5.3 Market Influencers 35
5.3.1 Market Drivers 35
5.3.2 Market Inhibitors 35
5.4 Market Forecasts 36
5.4.1 User Forecasts 36
5.4.2 Message Forecasts 36
5.5 Messaging Deployments 37
5.6 Country Highlights 37
5.6.1 United States 37
5.6.2 Canada 39
6 CARIBBEAN AND LATIN AMERICA 41
6.1 Market Overview 41
6.2 Market Trends 41
6.2.1 Two-way B-SMS Provides Impetus to Messaging 41
6.2.2 Operators Addressing Interoperability Issues 42
6.2.3 Mobile Data Market Growth Trends 42
6.2.4 Two-Way Pagers and Mobile e-Mail 42
6.2.5 Next-Generation Networks to Facilitate MMS Deployment 42
6.3 Market Influencers 43
6.3.1 Market Drivers 43
6.3.2 Market Inhibitors 43
6.4 Market Forecasts 43
6.4.1 User Forecasts 43
6.4.2 Message Forecasts 44
6.5 Messaging Deployments 44
6.6 Country Highlights 44
6.6.1 Brazil 44
6.6.2 Venezuela 45
6.6.3 Mexico 45
7 EUROPE 47
7.1 Market Overview 47
7.2 Market Trends 47
7.2.1 Messaging to Stabilize Declining ARPU 47
7.2.2 Hectic Vendor Activity in MMS Deployment 48
7.2.3 Unified Messaging Shows Promise 49
7.2.4 Germany Leads B-SMS Markets 49
7.2.5 Scandinavia Leads in Operator Messaging ARPU 49
7.2.6 B-SMS Being Offered on Wireline Networks 49
7.2.7 LogicaCMG Is the Leading SMSC Vendor 49
7.3 Market Influencers 49
7.3.1 Market Drivers 49
7.3.2 Market Inhibitors 50
7.4 Market Forecasts 50
7.4.1 West European User Forecasts 50
7.4.2 West European Message Forecasts 51
4.4.3 East European User Forecasts 51
7.4.4 East European Message Forecasts 52
7.5 Messaging Deployments 52
7.6 Country Highlights 54
7.6.1 Germany 54
7.6.2 U.K. 54
7.6.3 Finland 54
8 MIDDLE EAST AND AFRICA 55
8.1 Market Overview 55
8.2 Messaging Deployments 55
8.3 Middle East Market 55
8.3.1 Israel Is the Largest and Most Advanced Messaging Market 56
8.3.2 Emblaze and Followap Are Headquartered in Israel 56
8.3.3 Market Forecasts – Middle East 56
8.4 African Market 57
8.4.1 South Africa Is the Technology Leader 57
8.4.2 Market Forecasts - Africa 58
9 ASIA-PACIFIC REGION 59
9.1 Market Overview 59
9.2 Market Trends 59
9.2.1 B-SMS Growth Trends 59
9.2.2 Japan and Korea Lead in Picture Messaging 60
9.2.3 2002 Football World Cup Showcase 60
9.2.4 Major Markets Launch MMS 60
9.2.5 Next-Generation Launches Propel MMS 60
9.2.6 Taiwan’s Success with Pre-paid 61
9.2.7 Mobile Data to Be a Driver for Growth in Japan 61
9.2.8 China on a Rapid Growth Path 61
9.2.9 Indigenous Technologies Co-exist with Global Standards 61
9.2.10 Value-Added SMS Applications on the Rise 62
9.3 Market Influencers 62
9.3.1 Market Drivers 62
9.3.2 Market Inhibitors 62
9.4 Market Forecasts 63
9.4.1 User Forecasts 63
9.4.2 Message Forecasts 63
9.5 Messaging Deployments 64
9.6 Country Highlights 64
9.6.1 Japan 64
9.6.2 South Korea 67
9.6.3 China 67
9.6.4 Hong Kong 68
9.6.5 Singapore 68
9.6.6 Philippines 69
10 MARKET FORECASTS BY REGIONS 71
10.1 Messaging Users by Technology 71
10.1.1 B-SMS Users by Technology 71
10.1.2 A-SMS Users by Technology 72
10.1.3 MMS Users by Technology 72
10.2 Messaging Users by Region 73
10.2.1 B-SMS Users by Region 73
10.2.2 A-SMS Users by Region 73
10.2.3 MMS Users by Region 75
10.3 Mobile Messages by Technology 75
10.3.1 B-SMS Messages by Technology 75
10.3.2 A-SMS Messages by Technology 76
10.3.3 MMS Messages by Technology 77
10.4 Mobile Messages by Region 77
10.4.1 B-SMS Messages by Region 77
10.4.2 A-SMS Messages by Region 77
10.4.3 MMS Messages by Region 79
11 CONCLUSIONS & RECOMMENDATIONS 81
11.1 Conclusions 81
11.2 Recommendations 81
11.2.1 For Vendors 81
11.2.2 For Operators 82
LIST OF FIGURES
Figure 1: Mobile Messaging Users – Worldwide, 2002 13
Figure 2: Mobile Messaging Users - Worldwide, 2008 13
LIST OF TABLES
Table I: Mobile Messaging Users - Worldwide, 2002-2008 23
Table II: Annual Mobile Messages - Worldwide, 2002-2008 23
Table III: Vendor Positioning Matrix 29
Table IV: Mobile Messaging Users - Canada and US, 2002-2008 38
Table V: Annual Mobile Messages - Canada and US, 2002-2008 38
Table VI: Selected Canada and US Messaging Deployments 39
Table VII: Mobile Messaging Users - Caribbean and Latin America, 2002-2008 45
Table VIII: Annual Mobile Messages - Caribbean and Latin America, 2002-2008 46
Table IX: Selected Caribbean and Latin American Messaging Deployments 46
Table X: Mobile Messaging Users - Western Europe, 2002-2008 52
Table XI: Annual Mobile Messages - Western Europe, 2002-2008 53
Table XII: Mobile Messaging Users - Eastern Europe, 2002-2008 53
Table XIII: Annual Mobile Messages - Eastern Europe, 2002-2008 54
Table XIV: Selected European Messaging Deployments 54
Table XV: Selected Messaging Deployments in Middle East and Africa 57
Table XVI: Mobile Messaging Users - Middle East, 2002-2008 58
Table XVII: Annual Mobile Messages - Middle East, 2002-2008 59
Table XVIII: Mobile Messaging Users - Africa, 2002-2008 60
Table XIX: Annual Mobile Messages - Africa, 2002-2008 60
Table XX: Mobile Messaging Users - Asia-Pacific, 2002-2008 65
Table XXI: Annual Mobile Messages - Asia-Pacific, 2002-2008 65
Table XXII: Selected Asia-Pacific Messaging Deployments 67
Table XXIII: B-SMS Users by Technology, 2002-2008 73
Table XXIV: A-SMS Users by Technology, 2002-2008 74
Table XXV: MMS Users by Technology, 2002-2008 75
Table XXVI: B-SMS Users by Region, 2002-2008 76
Table XXVII: A-SMS Users by Region, 2002-2008 76
Table XXVIII: MMS Users by Region, 2002-2008 77
Table XXIX: Annual B-SMS Messages by Technology, 2002-2008 78
Table XXX: Annual A-SMS Messages by Technology, 2002-2008 78
Table XXXI: Annual MMS Messages by Technology, 2002-2008 79
Table XXXII: Annual B-SMS Messages by Region, 2002-2008 80
Table XXXIII: Annual A-SMS Messages by Region, 2002-2008 80
Table XXXIV: Annual MMS Messages by Region, 2002-2008 81
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Summary: |
430.8 Billion Mobile Messages Sent in 2002, says Telecom Trends International
Research Firm Estimates Show 580.2 Million Mobile Messaging Users by Year-End 2002
MMS to Grow Fastest, But Advanced SMS to Have More Users by 2008
During 2002, 430.8 billion mobile messages were sent globally, according to a report just released by Telecom Trends International. These messages were sent by an estimated 580.2 million mobile messaging users, the report said.
This reflects the growing acceptance of mobile messaging worldwide, said Naqi A. Jaffery, President, Telecom Trends International (TTI). “Until now, services such as SMS (short message service) were local or regional in scope,” Mr. Jaffery said. “However, now they are extending beyond national borders, creating a true global village.”
In 2002, 95 percent of the users used text-based or Basic SMS (B-SMS). Messages based on services such as Enhanced Messaging Service (EMS) and Smart Messaging constituting Advanced SMS (A-SMS) was used by four percent of the users, while multimedia messaging (MMS) was used by only one percent of the users.
TTI has revised its six-year forecasts to bring them in line with emerging market realities. Growing from a small customer base, MMS users will grow the fastest. However, by 2008, A-SMS will have the biggest share of the messaging market, accounting for 38 percent of the users, followed by B-SMS with 34 percent of the users, and MMS with 28 percent of the users by 2008.
There is no doubt that MMS is on a fast growth track, thanks to a flurry of contracts signed by Ericsson and Nokia, Mr. Jaffery said. Globally, MMS messages will grow at a compound annual growth rate (CAGR) of 154.8 percent over the next six years.
However, MMS will not become a mass consumer product in the near future, Mr. Jaffery said. Thus, in terms of the messaging traffic, MMS will remain behind B-SMS and A-SMS during the next six years.
On the other hand, text messaging will move from B-SMS to A-SMS, primarily because of the ability to send longer messages. Thus, most of B-SMS traffic will migrate to A-SMS which will grow at a CAGR of 132.7 percent
Topics covered in the report include:
Market trends: Discussion of global and regional trends with respect to mobile messaging, and examination of marketplace developments
Vendor decision-drivers: Discussion of criteria used by operators in evaluating vendors, factors affecting carrier spending, and specific needs of operators in different regions.
Carrier deployment and strategies: Discussion of mobile messaging solutions with respect to their deployment and success in various regions, as well as an analysis of operator pricing.
Market statistics: Statistics relating to messaging subscribers, regional subscriber usage uptake and volumes of messages.
Forecasts covering B-SMS, A-SMS, and MMS users and messages.
In order to provide a comprehensive understanding the capabilities for mobile messaging solutions and the global climate for their adoption, Telecom Trends International has launched the following five reports:
1. Mobile Messaging: Who is Driving It and What Should the Operators Do to Ensure Success
2. Mobile Messaging: Operator Revenue and Investment Analysis
3. Mobile Messaging: Which Technologies and Applications Will Succeed?
4. Mobile Messaging: Vendor Strategies and Profiles
5. Mobile Messaging: Stats Book |
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