Nokia Sees Music, Image Messaging As Key
Saturday February 24 8:43 AM ET
By Paul de Bendern
CANNES, France (Reuters) - Nokia, the world's leading cell phone maker, said on Thursday music, video, and picture messaging would replace popular text messages as a major source of revenue for mobile operators pressed to deliver on huge investments they are making in the wireless Internet.
``Multi-media messaging will give immediate returns for operators in terms of revenues,'' Niklas Savander, vice president of Mobile Internet Applications at Nokia, told Reuters in an interview at the GSM World Congress, a trade fair in Cannes.
``We think it will take off like SMS (short messaging service) did,'' he said, adding he expected the service to be fully up-and-running by the end of this year in Europe.
The new service will offer mobile operators a way to exploit their new high-speed networks and generate revenues quickly, amid concerns that third-generation technology will take longer to develop than previously anticipated.
Telecoms operators in Europe, the world's largest mobile phone market, are burdened by over $100 billion in spending on next generation mobile phone licenses and face a similar steep bill for new network equipment. Some 13 billion SMS text messages are sent globally between cell phone users monthly at a cost of some 0.10-0.20 euros each.
Today, text messaging already accounts for up to 20 percent of some operators' revenues, according to recent research. Savander, attending the world's largest cell phone meeting, said operators had indicated the cost of sending the new multi-media messages could be between 0.50 and 2.0 euros each.
Charge For Picture, Audio, Video And Text
The new method of sending messages would enable telecoms operators to charge not just for the text but for all additional content sent, Savander said. Consumers could attach a photo picture, music or video clip to a text message and then send them to other cell phone users.
Telecoms carriers, who must convince jittery investors about how they will turn their big investments in third-generation (3G) networks into profits, are worried about how they will hang on to customers and their spending habits once they move away from the current slow, but popular GSM phone standard.
``It seems the (mobile phone) industry is now agreeing to the direction we're going in. They agree to what kind of services are needed and they're singing the same song, but it's now time to deliver products and services (to customers),'' he said.
Industry experts hope these content-driven services will go some way to boost confidence in new GPRS systems coming into play in 2001 and 2002, especially after Wireless Application Protocol (WAP) has failed to deliver its promises so far.
``So far everybody knows that the mobile Internet has been more hype than reality and a disappointment -- except SMS and we see a lot of new opportunities to drive growth rates here,'' said John Jensen, managing director of J.P. Morgan Chase's European equity research department.
Although Nokia would be the first to launch this new messaging technology, Savander said he expected rival mobile network manufacturers to start entering this area soon.
He declined to give financial details about the system.
But Savander said it would work on GSM, GPRS and 3G and cater not only for Nokia handsets, but rivals as well.
``People who don't have such phones will still get the message delivered to an Internet address. If they have one,'' he added.
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