Wireless Firms Eye Instant Messaging

By Santosh Menon

The mobile industry on Monday unveiled plans to bring instant messaging (IM) to cell phones later this year to tap a new source of revenues and build on the success of text messaging.

Fifteen of the world's top mobile operators, including Vodafone, Orange, T-Mobile, Telefonica and China Mobile announced plans to roll out PC-type instant messaging services initially targeting some 700 million mobile users.

Industry officials said the targeted user base would be much larger when other operators signed up to the initiative, which is expected to use open standards and work across networks, with pretty much the same features as computer-based messaging.

But the service will not be free, and mobile operators plan to charge clients using the familiar "calling party pays principle," under which users pay for sending messages but not for receiving them.

The operators did not give pricing details when announcing the industry-wide initiative at the 3GSM mobile technology fair in Barcelona.

Instant messaging is a new opportunity for the mobile industry to grow its data revenues, said T-Mobile Chief Executive Rene Obermann, adding that he did not think the planned service would eat into operators' existing text messaging revenues.

"IM is more chatty. SMS (text messaging) is fire and forget ... Messaging will trigger more messaging," Obermann said. T-Mobile, a Deutsche Telekom unit, plans to launch the service in Germany this year.

Mobile operators have so far struggled to increase data revenues from areas other than text messaging, and new third generation (3G) mobile services such as video-calling and high-speed Web browsing are yet to provide a significant increase in data revenues.


Text messaging remains by far the biggest source of data revenue for mobile operators, but the industry believes instant messaging would build on its success by adding features such as presence information, instant delivery and the ability to track a whole conversation.

"The mobile franchise is the biggest in the world with 2 billion customers," said Vodafone Chief Executive Arun Sarin, referring to the market potential for the new service.

Vodafone and rival France Telecom's mobile unit, Orange, separately announced that they were close to an agreement for instant messaging interoperability across their networks, and were seeking support from other operators and Internet service providers to adopt the same to stimulate customer demand.

Industry officials said instant messaging would be popular in countries like India and China with low computer penetration but a growing mobile population.

The mobile operator's push for instant messaging could also prove music to the ears of mobile handset makers, allowing them to produce and sell a new range of phones if the service takes root in the mobile industry.

Only pricier handsets such as smartphones with software from Symbian and Microsoft can be upgraded to support instant messaging now, and operators said the success of the new service would depend on it being available to the most basic models.

"We want to ensure that all devices are IM compatible, not just the high-end phones," said Orange Chief Executive Sanjiv Ahuja.

(Additional reporting by Robert Hetz)

Copyright 2006 Reuters Limited.

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