After voice, text messaging is the most successful telecoms application. SMS has grown into a global community of users relatively fast. Priscilla Awde considers what’s next for messaging. 

With no technical barriers, SMS is ubiquitous, cheap, fast, convenient and nets operators a tidy profit making it difficult to see where messaging will go and if can anything match the texting phenomena.

Crystal ball gazing is a risky game but there are some obvious trends: many of the barriers to converged messaging are being resolved. Smart phones are more available and less expensive, interoperability becoming less of a problem and 3G is rolling out so speeds are increasing along with bandwidth. People increasingly want a media rich, easy to use messaging experience at inexpensive, predictable and simple tariffs.

The success of social networking means people are more familiar with multimedia applications and sharing content within users groups. Older services like MMS, email and unified messaging are taking off and innovative applications are emerging. GPS and navigation have introduced a raft of potential new next generation services including geo-tagging and sharing multimedia content.

Third party application developers are tying social networking with instant messaging (IM), and presence into new packages. Content owners and brand name companies are waking up to the marketing potential of fast, global mobile channels. This is potentially an exciting and innovative phase for mobile messaging.

Along with growing demand from users expecting the same facilities on mobiles as on PCs, another driver for the next wave of messaging applications is the need for operators to increase profits by introducing more higher margin services.

“We will see lots of different ways of reaching friends and contacts and more flexible ways of using different messaging technologies. Operators need to develop platforms, offer more and integrate social networking capabilities with other applications and protocols. Social networking is opening up peer-to-peer and one-to-one communications moving beyond them to a one-to-many interactive environment,” suggests Nick Ingelbrecht, research director at Gartner (gartner.com). “The choice of which messaging applications people use depends largely on context and operators should look at a variety of different applications and messaging platforms.

“The trick is to provide integrated clients on devices enabling users to move very easily between different applications and messaging protocols.”

Gartner predicts mobile messaging will explode as revenues across major markets grow 15.7% netting $60.2 billion in 2008 when 2.3 trillion messages will be sent worldwide - a 19.6% increase over last year.

While volumes of SMS and picture messaging will grow, Gartner expects people to share photographs via mobile communities and social networking portals. Intense competition between carriers, more international charging regulations and unlimited bundles will flatten or decrease revenues from peer-to-peer messaging. Mobile consumer email is becoming more common and IM is expected to become a mass market application in developed markets.

Compared to the comparatively slow store and forward SMS or emails, IM is immediate, adds the presence facility and brings what is already a popular form of contact between computer users to the mobile platform. Combined with GPS, people can see who is available and where making it easier to arrange meetings on the move. As ever cost is a factor making flat rate data plans even more important in stimulating usage.

Many of the 26 million mobile IM users in Europe think it should be free states Steven van Zanen, head of messaging at Acision (acision.com). However take up may be hindered by slow networks: 3G is still below 10% penetration with 300 million active users he believes. “The value of multimedia texts has been underestimated. MMS as a channel offers very good capabilities which are not marketed properly: if it is linked to blogging sites automatically it will increase traffic,” says van Zanen.

Relatively new, voice SMS may succeed because talking and listening are easier and faster than reading and typing. Available on all handsets some believe it could become as popular as texting. “Carriers know how to launch SMS so there is no new learning curve, there are fewer barriers to usage and voice SMS can be delivered and sent from any phone,” explains Tom Clayton, CEO/president of Bubble Motion (bubblemotion.com). “Price is crucial and must be the same as text SMS.”

Totally disagreeing, Vishwanath Alluri, CEO at IMImobile (imimobile.com), says commercial issues have made voice SMS a confirmed failure. “Pricing must be cheaper than voice calls and, if it is the same price, why send a voice SMS? It is hardly used in India because there are no added customer benefits; it is a modified version of the voice mail system and, although it is good for business users, is not popular. Texting will continue because it is simple and ubiquitous.”

There is a growing market for premium SMS which is opening up new opportunities especially for businesses needing to communicate quickly and simply with customers perhaps to confirm appointments or parcel delivery times.

Mobile email is growing in popularity as smart handsets become more available – it is now a ‘must have’ business application and one element in the unified messaging mix. People want to control who has access to them when, over which device and to direct messages to a number of different units according to pre-defined priority.

Although slow to take off, MMS could become an enabler for social networking but Brian Roundtree, CTO at SnapIn Software (snapin.com), warns it is outdated, complex, unreliable and with unclear costs. “MMS is not fully functional and will go away because there are better applications over IP. Although there could be a way to fit everything into MMS, this is not a reliable platform for investment. MMS is too complex and doesn’t fit the need.”

As gatekeepers to the mobile advertising world operators are opening up their networks and adding value. Advertisers can enrich messages with multimedia content and direct them to segmented and specifically targeted audiences. Gartner predicts mobile advertising revenues will exceed $2.7 billion this year.

Still a nascent market, mobile advertising could dramatically change the sector with users getting free services if they are willing to accept ads. “Mobile advertising is a powerful way for operators to increase revenues without adding subscribers,” believes George Yazbek, strategic marketing manager at Jinny (jinny.ie).

The market is changing and mobile operators, more used to controlling the entire user experience and owning customers, may have to relinquish some control to stay competitive and innovative. Consolidation and disruptive new entrants like Nokia and Google along with PC based services like MSN and Skype are complicating the situation, vying for market share and competing with operators used to controlling the mobile environment. “Mobile operators are frightened of everyone seeing competition from all comers which is not necessarily a bad thing,” says Gartner’s Ingelbrecht. “Operators want to continue to milk services like SMS as long as possible but consumers will vote with their feet to get what they want and exploit pricing opportunities.”

In this complex and rapidly growing market, where there are hundreds of different handsets, multiple platforms and technologies, interoperability is still an issue. Pascal Lorne, CEO at Miyowa (miyowa.com), suggests the only interoperable service is one which follows the PC model. Google, MSN or Skype are known, used and wanted on mobiles and operators should offer them as premium services charged by monthly fees. “Operators increasingly realise they must ally with disruptive players even if they lose some control. They are putting in gateways to manage traffic and ensure it goes over their networks rather than connecting directly. Mobile operators will still control billing and therefore customers although more content and voice messages will move into free or a paid by advertising model.

“Carriers have the weapons to fight and to control data flows but it will take five years before users will have the same services on mobiles as on PCs. Next generation users want to be connected to a virtual community and IM is the way to do it,” continues Lorne.

Success depends on making applications intuitive, easy to use and automatically provisioned in shops or over-the-air. Messaging platforms must be integrated with other device applications and pre-embedded into handsets, suggests Michel Bresner, senior marketing VP for Oz (oz.com), who warns there are still many barriers for anything more complicated than SMS. “The challenge for growing and larger adoption of IM and social networks on mobiles is cumbersome set up on devices. Operators see customers want more messaging features and a more graphical environment with attachments to complement not replace SMS.

“There are three pillars for how users will connect with friends: deferred messaging – email; instant access or a live experience through instant messaging and presence which allow people to see the status of contacts. The next step in mobile messaging is to combine and blend all three,” concludes Bresner.

Whatever the platform, device or application operators, handset manufacturers, developers and content owners will collaborate to meet the growing demand for innovative messaging. It is becoming critical as business users and consumers increasingly see mobiles as their main communications tool for work and play.