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Mobile Entertainment & Commerce
...the analyst view
Edition Thirty Four - 29nd August 2007 | |
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Is SMS the future of mobile messaging?
A study of the SMS market reveals that operators and service providers are missing out on some €3.6 billion revenue because they are not pursuing the opportunities offered by value-added SMS services, because operators are focusing on other messaging technologies that could — and I stress could — boost ARPU.
All this is odd really. Per megabyte, SMS is far more lucrative to operators than any other data service. It also doesn’t clog the networks as other data services are likely to do and text has become an established communications channel among the user base that you would think that the first port of call for developing value add services would be to look at how to squeeze more out of text.
The problem stems from bundling SMS within call and texting packages. Coupled with the drive to offer more mobile data services around MMS and WAP push — and to a lesser extent 3G downloads — and it looks like SMS isn’t being exploited to the levels that it should.
There is also the problem that the areas where value has been added through SMS — using it as a billing mechanism and, more importantly, as a premium rate-based voting and interaction tool with TV and other media — has hit a wall. For a while there, operators, service providers and TV companies were making a tidy profit from the PSMS voting on TV shows. Not anymore. Those that still run are giving ‘profit’ away to charity and the bottom has, temporarily fallen out of this market.
So what how can value added SMS be rethought to deliver some of this missing €3.6 billion? Enhancement of the service is one area. Offering more from SMS — crucially so that consumers will pay more to use it — is the answer, says Anam Mobile which conducted the initial study. But can that really compete, down the line, with MMS and richer messaging technologies?
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€3.6bn of SMS revenue overlooked by global mobile operators each year
Global mobile operators are losing out on as much as €3.6billion (£2.4billion) of revenue per year through lost opportunities to create value-added SMS messages, believes Ireland’s Anam Mobile’s review of how operators can increase the average value of each text message sent across their networks.
While more than 600 billion messages are sent worldwide in the first quarter of 2007, many operators are focusing on other, less well-established, data applications as they aim to increase ARPU and profitability.
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Currently, a large proportion of text messages are included as part of bundled deals provided by operators and therefore are, in effect, free to the customer. This means that each individual message has a low perceived value to the user and almost no financial value to the operator.
However, there are many applications that could potentially be introduced to consumers through SMS. If the subscriber is able to use SMS to interact with their device in a more efficient, more enjoyable or more productive way, then they will be willing to pay a small additional fee for those SMS messages. The subscriber will accept that these messages fall outside of the ‘free’ text bundles, or add on a new bundle to their service plan; SMS messages are one of the few services that the user will always know how to use on their mobile phone.
Gerry McKenna, CEO of Anam says, “I am constantly surprised that, until now, operators have not fully grasped the opportunities available to them through SMS. The €3.5 billion of missed revenue can be earned by simply enhancing the text services that they offer customers. There doesn’t need to be a shift in consumer mobile behaviour - they can stick with their trusty SMS message, whilst the operator is able to create immediate results with additional revenue streams.”
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Mobile search and ad-based discovery gets a boost in Japan
Leading Japanese internet search company Rakuten has formed a joint venture with enterprise search firm and Fast Search & Transfer to develop and provide mobile search and advertising service in Japan.
The new entity, Rakuten Fast Mobile Search, will be an equal joint venture with total capital and capital reserve of 800 million Yen. It will combine Fast’s expertise in the mobile and advertising markets with Rakuten’s customer base of 38 million users. By partnering to develop innovative search capabilities for the mobile market, Rakuten and Fast are delivering on the rapidly growing demand for these services and capitalizing on the business opportunities of this emerging market.
Mobile search services will initially be rolled out to Rakuten mobile sites this year, and subsequently be offered to third parties on an OEM basis. The companies will collaborate to further advance the development of additional mobile business and technology innovation.
“In order for us to continually enhance customer service and loyalty, generate new revenue and optimize content, it is essential that we partner with an innovative search company like FAST,” says H Mikitani, President and CEO of Rakuten. “It allows us to deliver the information that our members want, which will enable us to maintain a competitive edge in an aggressive market.”
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Swisscom Mobile introduces ad-supported mobile music video service
Swisscom Mobile has this week launched an advert-enabled mobile music video service through their Vodafone live! portal, offering customers an extended choice of music content ranging from the biggest names in music, to local artists, to rising stars.
The launch represents the second phase of Swisscom Mobile’s pilot programme in mobile advertising, which is being carried out in collaboration with Ad Infuse and Minick, leaders in delivering highly personalized mobile advertising experiences and video streaming solutions.
In early June, Swisscom Mobile together with Ad Infuse and Minick launched Switzerland’s first ad-supported video service, which freed customers from paying for streaming video on their mobile devices. The pilot programme initially focused on a comedy channel and has now been extended into the music video space with today’s announcement.
“Music videos on mobile devices have already proven to be very popular with our customers and through this cooperation with Ad Infuse and Minick, we are now able to complement our premium service with an ad-supported model,’’ says Marius Dano, Strategy Manager at Swisscom Mobile. “As a result our customers benefit by having more content available to them at a different price-point.’’
Swisscom Mobile is Switzerland’s leading mobile telecoms provider, with more than 4.6 million mobile customers and Ad Infuse continues its landscape-changing work with them in this second phase.
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Mobile web-feed service brings publishers and feed-based websites to mobile
Mobile ad company Wattpad has officially launched FeedM8 — Feed-Mate in SMS lingo —a new service that enables mobile users to access content from feed-enabled websites, such as blogs, news, sports and weather information, while providing opportunity for content publishers to monetize their content.
"Anyone who has tried mobile browsing will tell you that most websites are not mobile friendly or do not have mobile specific versions. Mobile users are still having a hard time gleaning information from the Internet," says Ivan Yuen, Co-founder of Wattpad. "FeedM8 is a simple service that completely eliminates the need of mobile specific websites. With FeedM8, mobile users can browse the websites they want, while publishers add a new source of revenue."
In order to work with mobile devices, websites need to be selective of the information on each page and display them using various mobile standards. Additionally, the content needs to be tested on hundreds of phone models to ensure compatibility. For content publishers, this is time-consuming, error-prone and expensive. As a result, only large companies can invest in doing this. The web, for the most part, is inaccessible from mobile devices.
FeedM8 Publisher Network is a free program designed for content publishers, such as bloggers, to extend their reach and add a new source of revenue. The one-step sign up process takes just a few seconds. After signing up, content publishers can further customize the look and feel of their mobile site. FeedM8 also includes mobile appropriate advertisements and provides 60% of the advertising revenue to the content publishers.
Finally, content publishers can earn even more by becoming an affiliate and earn up to 60% of the referral's advertising revenue. With FeedM8, content publishers can now effortlessly monetize from mobile users. With FeedM8, Wattpad has created a complete ecosystem by mobilizing and monetizing web content.
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Superscape licenses Tira Jump 2007 platform to accelerate deployment of 3D mobile games
Superscape, the world’s leading publisher of 3D mobile games, has licensed the Tira Jump 2007 Platform to accelerate the porting, optimization and deployment of its titles across multiple handsets.
Superscape’s content portfolio is created by both in-house and outsourced development teams. Since third party developers embrace a significantly different approach to coding than Superscape’s in-house team, porting new titles across multiple handsets is complex, time consuming and expensive. By using Tira Jump however, Superscape can standardize its deployment processes and more readily address the challenges of content deployment on a global scale.
“Of all the steps required to bring new titles to market, porting is the one process that entails the greatest complexity and cost,” says David Brittain, VP of Technology at Superscape. “Tira Wireless provides us with technology that enables us to standardize our approach to porting, regardless of whether we use internal or external development teams to create our applications.”
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Mobile becoming a breeding ground for card not present fraud
As UK payments association APACS reveals that card not present (CNP) fraud has risen by 74 per cent since 2003, many point the finger of blame at the internet. But a recent study by Communications Fraud Control Association (CFCA) suggests that mobile fraud is prolific, finding that the annual global fraud losses to the telco industry could be in excess of $60 billion or five per cent of total revenues.
Surprisingly, the majority of mobile phone fraud committed is still done so by ‘old skool’ tactics such as the ‘new office’ scam. For example, a smart looking company opens new offices and wants the latest smartphones and premium services. For an operator, it’s a great opportunity to sell a complete package. Within days the contract is signed, handsets are delivered, down payment made and service activated. A week later, the company vanishes and a massive unpaid phone bill appears.
However, as the industry is transformed by convergence and next generation services, this case highlights traditional tactics continue to be a problem. Mobile fraud expert Erik Splinter reckons this is only the beginning. He explains:
“There is evidence that many fraudsters are revisiting their original fraud strategies to catch operators on the back foot. Fraudsters have an exceptional ability to understand the procedures involved in setting up a new account. They know where the flaws are and how quickly they can get away with making a theft before being stopped.
The fear is that fraud will escalate because these opportunities are getting more tempting. Subscription fraud is becoming big business and will continue to do so, especially with organised crime becoming increasingly involved.”
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GSMA Mobile World Congress 2007
12th - 14th November 2007, Venetian Macau
The only place where the best converge. The GSMA Mobile Asia Congress 2007, formerly known as 3GSM Mobile Asia Congress, is THE place to connect to the Mobile future! Mobile Asia Congress is a unique environment for leading companies to showcase the latest in mobile products and solutions, a place for the industry's innovators to develop new ideas and for its leaders to set out their visions for growth.
Contact us today to register for the most highly-regarded event in the mobile industry.
Hong Kong: + 852 2593 1286
UK: + 44 2077 592 315
Make the greatest, most effective investment in yourself and your company by being part of the most highly-regarded event in the mobile industry, the GSMA Mobile Asia Congress.
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Content and Media Solutions Architect
Excellent Salary, Dublin
A Content and Media Solution Architect is required to work for a global telco with international travel will be responsible for the development of content and media solutions. The Multimedia solutions that you will be working with will span IPTV, Mobile TV and Content Creation, Distribution and Management systems.
The successful candidate will have broad experience in any one of the following; Mobile TV, IPTV, Content Management, Rich Media, Service Delivery Platforms.
For more information and to apply please click here
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NEC and Valista Form Strategic Partnership to Target Payments Solutions Business Opportunities
NEC Corporation and Valista International Ltd, have formed a strategic partnership to target payments solutions business opportunities in Japan with secure and flexible payments offerings.
NEC and Valista's partnership includes joint development of the 'Value Chain' payments platform, an emerging payments platform fuelled by multi-industry offerings. The 'Value Chain' payments platform will be designed for deployment on the next generation network and integration of Valista's products into NEC's NGN service application platform.
"The arrival of the era of the Next Generation Network will have a considerable impact on the lifestyle of individuals and enterprise business models. NGN will enable a more real communication with a sense of immediacy. We expect that it will be possible to offer various services such as video/music delivery and digital commerce securely and cheaply, with enhanced user experience," commented Shigeru Okuya, Assistant General Manager of the 2nd Network Software Division, NEC Corporation.
Truphone Launches InTones: Choose The Ring Your Callers Hear
Truphone today introduced more internet-age wizardry to mobile telephony: Truphone InTones. From a selection of nine, customers may now nominate the ringing sound their callers hear, perhaps choosing one to match their mood or personality. Truphone InTones are 100% free to both the caller and recipient.
The choice of InTones is: Rock, Jazz, Bluegrass, Hip-hop, Ska, Disco, Euro house, Standard (plain 'ring-ring'). Truphone InTones are played by the Truphone servers before the call is connected. This means there is never any associated cost for either the caller or callee. It is similar to hold music, but without any cost.
James Tagg, Truphone's chief executive officer said,"Truphone InTones use the Internet to bring an enjoyable and free service to customers, typifying Truphone's fresh approach to mobile communications."
Price: £1490 (Single User) £1990 (Multi User) £2990 (Enterprise Wide)
This detailed report offers a complete analysis of the mobile user generated content market whilst providing vital forecast data on subscriber numbers and revenues up until 2012.
It segments the UGC market into three main categories including, Social networking, Dating/Chatrooms and Personal Content Delivery. The report also comprises interviews with key players, focused case studies and analysis from representatives of some of the leading organisations involved in this promising sector.
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