This issue's panel gazes beyond voice and SMS at the wireless apps of the future. While few doubt that by 2010 every mobile phone will have email capabilities, major changes are required in usability and security if more than a minority of customers are actually to use the service
Is mobile telephony's SMS, the black-and-white television de nos jours, set to be swept away in a tidal wave of more colorful technologies like wireless email, multimedia messaging and the like‾ Not according to several members of this month's HotHouse panel which found itself arguing - sometimes heatedly - over the speed with which more sophisticated technologies would overtake today's simple but ubiquitous mobile services.
Participating in this issue's discussion, moderated by Financial Times senior technology editor Alan Cane, were executives from UK operator O2, Telsis, a manufacturer of carrier-grade mobile switches, Colibria, a software group specializing in IM and presence services, fastmobile, an integrated messaging company, Visto, a provider of 'push' email software, and Clickatell UK, a provider of bulk SMS messaging services.
Since the beginning of the mobile phone revolution a quarter of a century ago, the services available to subscribers have been limited by the available technology to voice and, by a lucky accident, SMS (SMS was intended as an engineering rather than a consumer service). With the advent of the higher capacities promised by 2.5G, 3G and beyond, all that seems set for change.
The list of new services includes email, instant messaging, presence (a sense of who else is online) and multimedia messaging complete with still and moving images. All of these are technically possible and, it can be argued, attractive enough for people to pay for. The question is: how do we get there from our present position of voice, SMS and somewhat unsatisfactory Internet accessibility‾
Some observers, David Pearce for example, group marketing director for Telsis, argue that progress will be slow and that the overwhelming bulk of a mobile operator's revenues in, say, 2010 will still be derived from voice and SMS services. 'There are lots of statistics suggesting corporates are taking up wireless email. Now, it's a great service - but for a niche market,' he noted. 'After all, we don't see billboards saying 'Email Now!'. We don't see television programs saying 'Instant message to vote Now!'. We see text, text, text. Connectivity, the ability to communicate, is the key to the future and voice and simple-to-use SMS services will form the majority of these communications.'
It was a viewpoint that resonated with Mike Short, VP of R&D for O2 and chairman of the Mobile Data Association. 'The kings of SMS are not about to be usurped by the princes of wireless email,' he argued, going on to point out that widespread as SMS is, it still has some way to go before the market can be regarded as saturated. It is, for example, still chiefly the prerogative of the young - it has yet significantly to penetrate government and the business sector, and there are geographical regions where it has yet to be used extensively.
Short said SMS works on every GSM phone worldwide. 'As we will be approaching 3billion GSM phones by 2010, the kings of SMS will be here for a long time to come.' He made it clear, however, that he expected the more advanced services eventually to predominate. 'The princes of wireless email are already starting to show some of their capabilities,' he conceded, pointing out that by 2010, every mobile phone would have the ability to send and receive wireless emails. But there would have to be changes if more than a minority of customers were actually to use the facility.
'Wireless email is not easy enough for the customer yet. The storage factors have not been fully addressed, neither have the security nor anti-spam issues, and this undermines some of the trust in mobile email. Over 35 million phones in the UK today already have mobile email capabilities - it's just not switched on. The key question is usability and how to make it more user friendly for everyone,' Short concluded.
Keith Gibson, chief executive of Colibria, led the charge for the 'princes of email'. 'SMS is legacy,' he claimed. 'In telecommunications, things develop through evolution, not revolution. SMS is black-and-white television. The next generation of messaging will be color TV and you don't go back to black-and-white after color - except for the reversing camera on the car.'
'We have to find ways of moving forward with these new technologies because the next generation is coming through from an environment where they are used to desk-top delivery of text through instant messaging services. They are used to blogging. They are used to sending their own blogs complete with audit trails for what they did a week ago, and they are used to having the ability to use aliases when they don't want people to know who they are. All of these services need next-generation technologies and those technologies are not supported in SMS.'
Personal experience guided John Hoffman's response. The chief executive of fastmobile pointed out that while there are probably a trillion text messages sent a year, there are three times as many emails. 'Customers are going to move to the wireless environment. My kids don't SMS anymore. They use instant messaging,' he said.
A major issue in the debate was the ease, or lack of it, with which the new services could be used. Hoffman waded in with a vengeance: 'There's a plethora of messaging services. The consumer, the business user and the operator are overwhelmed by icons, by that mess that sits on the screen of the handset. That is what we are trying to address. In the 20 years that mobile phones have been around, the address book has never changed - it's alphanumeric, non-icon, plain text, and at its simplest is no more than a phone number, but it doesn't tie things together.'
His essential point was that the address book enabled the user to initiate a voice call or an SMS message but was not integrated with other services such as email, voice instant messaging. 'To send an email, I have to go out of my address book into an email application and type the email address. I have to go into another application if I want to send a picture with it.' The way of the future, he said, would be a text or icon driven service integrating text, images and presence.
Brian Bogosian, chief executive of Visto, agreed that ease of use was critical. 'We are working on the user experience, simplifying not only the use of the product but its provisioning. There are 650 million corporate email customers and only five million are using wireless email, leaving a huge percentage that are not using anything mobile to access their email.
I think that instant messaging will grow increasingly over time in both consumer and corporate markets and that the failure on the desktop of unified messaging will be reversed in the mobile world.'
Unified messaging, he explained, brings together all the available messaging applications into a user interface that allows customers to choose the most appropriate service at any moment - presence software makes it easy to know who is online at any time. It had proved none too successful on the desktop, but Bogosian thought the convenience of having options available on the handset would make the difference.
For the most part, the panel were discussing services that originated with vendors - services they thought customers would want. A different perspective, a view of what customers were actually asking for, was provided by Deon van Heerden, managing director of Clickatell UK. He gave as an example hurricane alerts for the US government.
'We work with a number of US agencies. What they want is a platform where one warning message can be sent to multiple devices. If it, for example, fails to reach the handset within one minute then it gets escalated to voice mail, fax, landlines or pagers. There is a real requirement for this kind of service, but the question is, how do you price it‾'
'On the corporate side, we see a huge demand for internal messaging services. This is a particular problem for investment banks. Financial industry regulators these days require an audit trail for electronic communications and SMS doesn't provide that. Investment banks don't allow that because they can't trace insider trading. So they are looking for solutions that can provide them with an auditable trail. You won't price that as a per message service (Clickatell's conventional business model) but as a per user service, which creates a different commercial model for messaging services.'
Hurricane alerts, however, were not seen as huge revenue generators. By comparison, one 2004 UK television show, 'Who Wants to be a Millionaire,' generated 4,000 SMS a second at ‾.10 a pop - a reasonably good business to be in.
So if the loyal subjects of king SMS are right, the outlook for operators pinning their hopes to the new services might seem a little bleak - a view underscored by the ‾5 billion loss reported earlier this year by Vodafone, a paper loss caused by the company's decision to write down the value of assets acquired during a more optimistic period when data services were seen as sure fire money-spinners.
Pearce of Telsis took a balanced view. 'You could say it's depressing for operators because as volumes rise ARPU tends to get pushed down or come under price pressure. They will be a smaller generator of overall revenues but there's a space for these new services to generate not necessarily massive revenues but good profit margins - especially from business users.'
So the panel, driven by personal and business imperatives, agreed to disagree on the main question. There was consensus, however, that the future was a young person's game and that middle-aged executives were not necessarily the right people to second guess their aspirations.
'It will be interesting times when the youth of today are business customers and are demanding more than black-and-white service,' van Heerden ventured. Short concurred: 'The mobile phone is a personal device. Let's not invade our customer's privacy. Let's not go too far in assuming customers want things that are very personal,' he urged.