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Home > Business > Special

Will MMS revolution sweep India?

Priyanka Joshi | March 22, 2006

An industry, which by 2009 would see more than 2.6 billion handsets globally -- making the mobile phone the most common consumer electronic device on our planet -- is struggling to make its services like Multimedia Messaging Service a success story in emerging markets like India.

Moreover, mobile conferencing, push-to-talk and picture sharing has not grown into a preoccupation (as is popularly believed) in emerging markets like China, India or Latin America -- the new telecom tigers.

The primary reason is that when mobile users have to explore several levels before they find the service they are looking for, they lose interest. This acts as an immediate barrier to repeat usage.

This results in the penetration of camera phones and WAP-enabled devices to be far lower in emerging markets, states a recent survey, conducted by SmartTrust on 'Mobile Usage Trends'.

The research surveyed 6,800 mobile users aged 16-49 and covered all network technology types in 15 countries globally, including India. The study notes that only 18 per cent of camera phones are used for MMS/video viewing while only 10 per cent of General Packet Radio Service-capable handsets ever make a GPRS connection.

Yet, today's consumers show a strong desire for audiovisual content and services (such as music and television), making it imperative for operators to focus on them.

"Video content consumes enormous bandwidth and balancing end-user affordability with operator profit is still up for discussion," reckons Pankag Sethi, vice president (value added services), Tata Teleservices.

He adds, "While several operators have experimented with short video clips delivered either as a download or streamed to the handset, it is yet to become a revenue generator."

The cost, averaging between Rs 10-20, acts as a stinker for the customers, fed on cheap text messaging services and free bluetooth transfers.

The stakes

Despite the growing penetration of MMS and GPRS capable handsets, voice continues to be the primary need for mobile subscribers. Herein lies the challenge. Today's handsets can move content without even being active on the operator's network (via Bluetooth networks).

"Mobile users transfer an image taken with their cameraphones to PCs and print it or share it with friends and family via the Internet. There is no need to be exposed to network fees and send an MMS.

"In such a scenario, where is the operator's return on investment?" asks Sethi.

Outside of SMS (which still contributes over 80 per cent of a typical operator's data revenue) the industry is still searching for the killer data application that will ignite mass market data usage. Data services like MMS, that can provide mobile operators' the much needed upsurge in ARPUs (Average Revenue Per Unit), cannot be accomplished without adequate investment in Mobile Device Management technologies.

"If mobile phones are not preconfigured to send and receive MMS or video downloads, the operator can do little but hope the user contacts customer care and requests the relevant settings. With the absence of a real mobile 'killer-application' the chance of such proactivity are slim," reasons Tim Deluca Smith, Communications Manager, SmartTrust.

This leaves a substantial proportion of the devices on an operator's network unable to access the very same revenue generating services that they are hoping will raise their data revenues.

The answer, therefore, lies in numbers. "At present, 70 per cent of handsets (in India) requires customer care interaction (which is related to VAS) and takes approximately 20 minutes to resolve. The average operator could be losing potential revenues of approximately $4 million per month from un-configured devices," sums up Smith.

The Future

According to an Ericsson representative, operators must first come to billing agreements that complete full network interoperability for MMS. Once that hurdle is cleared, the next step will be for networks to devise revenue sharing systems.

"These financial hurdles may be easier to clear since they don't demand a total philosophical change from carriers," says Sethi of Tata Teleservices.

However, the networks need to respond to the way customers are using their services in time, otherwise valuable opportunities could be lost.

Operators who can deliver continued support and provisioning of services will be the ones exploiting the full potential of today's mobile markets and turning opportunity into profit, predict analysts.

The need to better understand the habits of today's mobile users and the social and economic pressures facing them has never been greater for the mobile operators, who are on the verge of 3G revolution in India.

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