MMS - you want the good news or the bad news?
MMS accounts for a tiny fraction of messaging volumes, is almost invisible in terms of overall revenue, and is highly costly for operators. But there is good news out there, according toYankee Group director of wireless research Declan Lonergan.
Lonergan said that the number of MMS phones in the market, customer interest in MMS and operators’ renewed attitude to MMS are all encouraging, although this is yet to be translated into revenues.
Yankee figures suggested that revenues from MMS for Western Europe probably totaled aournd €400 million in 2004, and would perhaps break the €1 billion mark in 2005. By 2005 Yankee forecasts MMS will be €5.5 billion market with MMS user penetration running at nearly 25%, compared to less than 5% today.
To explain this positive line of thought, Lonergan pointed to increased customer interest in MMS and improving operator understanding of how to market MMS.
In a survey carried out within the five main European markets (France, Germany, Italy, Spain, UK) the Yankee Group found that between 20-25% of respondents said they were interested in some form of multimedia messaging, whether that was a voice tag, picture or video message.
Lonergan said Norwegian operator Telenor, which has had some success in pushing MMS, carried about 45million MMS in 2004, compared to 16million in 2003. Telenor was an example, Lonergan said, of an operator with an enlightened approach to marketing, segmenting the market with targeted campaigns and pushing hard on the sale of MMS phones.
But many problems still remain. There are issues with basic user education, even getting he MMS settings configured correctly on the phone. There are network issues to do with content and media adaptation, and there are still roaming issues to be addressed, although most in-country interconnection agreements are now effective.
Operators need to emphasise the value of MMS rather than the cost, he said, and should avoid a price war. They also need to educate their channel so the customers are themselves educated in how to use MMS.
Laurence Alexander, ceo of O2 online, which deals with all the data and multimedia products within the operator, agreed that customer education was vital. He said that O2 was a policy that customers will walk out of its shop knowing how to work the functions on their phone, with settings configured and ready to go. Customers don’t care about the complexity behind the scenes to deliver and MMS from one handset to another, he said, they just want it to work and they don’t want to pay much for it.
Alexander says he is convinced the MMS market saw an inflexion point in February 2004, since when he has seen “phenomenal growth in MMS”. The number of users has increased 10% per month since then, which Alexander puts down to network improvements (just 50% of all MMS were successfully delivered by O2 in early 2003 versus around 95% now) and effective pricing, including bundles.
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