Understanding the SMS and MMS Service Market

– a picture of the current & future mobile service market

Everyone knows that the western European mobile operators have no choice but to focus on the revenue opportunities from “non-voice” mobile services. Up to now, SMS/EMS (Short Message Service/Enhanced Message Service) has slowly but surely proved itself as an ever-growing contributor to the mobile operators’ total turnover. It is therefore essential for all the mobile market players including the phone manufacturers, content providers and the mobile operators to know how the market for both SMS and MMS (Multimedia Messaging Service) will develop over the coming years. “Understanding SMS and MMS and how to make money on Mobile Services” has been compiled to be a comprehensive source of information about the business areas surrounding SMS/EMS and MMS.

Establishing SMS as a core business area for the mobile operators did not happen overnight. P2P (Person to Person) SMS messages have been around in Europe for the past 10 years, while Premium SMS services with revenue sharing were only first introduced in Norway at the end of 1999. Strand Consult has been following the mobile markets since the middle of the 90’s and published one of the first reports in the world about Premium SMS. Our understanding and knowledge of the European mobile markets has been crucial in our work on this new report. This report is very suitable as a comprehensive reference when market players are developing and optimising their future mobile strategy for SMS/EMS and MMS.

With the demand for growth and success on non-voice mobile services, “Understanding SMS and MMS and how to make money on Mobile Services” will – through thorough analysis – focus on creating an understanding of the existing market for both P2P SMS messages and Premium SMS services. This knowledge provides the background and information so that the report can thereafter concentrate on the future perspectives for both P2P and Premium SMS/EMS and MMS. This report describes the basic qualities the mobile services of the future will need to have to achieve success with the mobile customers.

The report analyses which basic factors have made the SMS market such a success. It will be factors similar to these that can help the MMS market forward. Also the report takes a close look at the speed and process with the which the SMS market has evolved and matured, which is also very interesting reading with MMS in mind in that it will be a similar process that will ready consumers to take up MMS services.

In connection with this reports analysis of the market for Premium SMS services, the services have been divided into 11 different types of services, including ringtones, logos, mobile games, chat/dating, adult services and so on. Each service type is analysed separately and specific case studies show how the services can be used. Also Strand Consult has estimated the market value of each service type up to the year 2005 – giving a detailed overview of the future prospects for each type of service. The market value for P2P SMS up to 2005 has also been included. Service case studies include cases from companies like Inspired Technology Group, Shazam Entertainment and News Omnimedia.

With regards to MMS, the report analyses which major factors will have the most effect on whether the MMS market will be influenced in a positive – or negative direction. The report estimates how the market value for different MMS services will develop up to 2005 and includes the estimates for P2P MMS as well. Included in the report are MMS case studies from Telenor (Norway), Westel (Hungary), Vodafone D2 (Germany) and TIM (Italy).

All our estimates of the future revenue possibilities for the different services are based on actual traffic figures from 2002 from both operators and content providers across Europe. With this data, we have been able to make excellent estimates for services in 16 individual European countries up to 2005. The estimates also take into consideration a number of other factors in the individual countries, factors like the terminal penetration of different technologies (GSM, GPRS and UMTS), expected new and replacement sales of terminals, the existing non-voice ARPU, each countries mobile maturity with regard to non-voice services and the business and revenue sharing models.

One very important feature of this report is that all the future revenue estimates have been split up into the operators perspective and the content providers perspective, so content providers can see how much prospective revenue they can expect after the mobile operator has taken his share. This is invaluable information when creating your mobile strategy – as it is not always the content that generates the most total revenue that will give the content provider the highest revenue after the mobile operator has taken his cut.

The market value is divided into:

P2P messages for both P2P SMS and P2P MMS messages. Premium mobile services for both SMS and MMS, where the market value is also split into:
-Types of media (ringtones, logos, chat/dating, news, games etc.)
-Types of service technology (GSM, GPRS and UMTS)

The report also examines a number of other areas including the pricing of SMS/MMS services, Digital Rights Management (DRM), the marketing and sales of Premium mobile services and the use of SMS to market and sell other services.

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