Instant messaging is an example of a failure of nerve by the mobile industry because they were afraid cannibalising their SMS income. Now their intra-EU SMS income is under threat from the redoubtable Viviane Reding, the EU's Commissioner for telecoms, they could pay a high price for cowardice.
The joke is that a growing number of people are using IM anyway, but operators are making very little from it because, as Paul Goode of M:Metrics explained, "We ask about access methods and 80% of consumers are using IM through the browser or some sort of messaging service or SMS."
He added, "As we see more clients on the handsets and more richer handsets come out, it will be usage of the existing providers of IM that will be the way it migrates onto mobile - the Yahoo!s, ICQs and those people. It looks like the operators have missed the boat."
Mobile IM provider Pairingo is a good example. It's 23 year old founder and chief technology officer, Martin Rosinski, pointed out that using Vodafone UK while in the EU costs up to £5 per megabyte. Using Pairingo IM, he claimed users could, within that 1Mb send and receive:
"¢ around 100,000 words by text-based message - the equivalent of some 4,500 SMSs - meaning that it costs less than a tenth of a penny to send the equivalent of an SMS message. By comparison, Vodafone's standard charge is 25 pence per text within the EU.
"¢ up to 15 minutes of vocal instant messages. This is equivalent to about 33 pence per minute [at £5 per MB] - but means a personal, vocal instant message can be sent for 5 pence
"¢ about 32 picture messages using a typical camera phone - that is just under 16 pence per picture
By way of comparison, Vodafone UK's standard charges to a customer using their phone within the EU are:
- 25 pence per text message
- 38 pence per minute to make a phone call and 19 pence per minute to receive a call
- 36 pence per MMS PLUS the data charges.
Customers will catch on - but that doesn't necessarily mean more money for operators, rather just more traffic within their flat fee packages. Ouch.