Short messaging service has found a niche in Europe with the youth market sending billions of short notes to each other during the past year. SMS messages often only cost pennies per messages. But with more than 5 billion SMS messages sent each month, many European operators have come to rely on the revenue derived from the service.
According to the GSM Association, more than 50 billion SMS messages were sent worldwide during the first quarter of this year, with more than 200 billion forecast by the end of 2001.
VoiceStream Wireless Corp. is hoping to replicate that success on this side of the Atlantic with the introduction of its Ping Pong Wireless Internet Text messaging service. The SMS service allows users to send messages of up to 140 characters in length between phones, as well as to and from any Internet e-mail address. While that may not be long enough to tell a life story, it should be enough to get a short message across.
In addition, Ping Pong customers automatically are provided access to America Online’s Instant Messenger service and Buddy List feature, the result of a deal between VoiceStream and AOL inked last February.
“We’ve taken a multitiered approach to this, SMS combined with a wireless Internet component targeted at the youth market,” said Nick Sears, vice president of marketing for new product services at VoiceStream.
The GSM Association noted that while the youth market is indeed a main driver to SMS growth around the world, the service’s usefulness is being exploited by other segments of the market and replacing voice conversions in some cases.
“Texting is now achieving mass-market status in many markets of the world. Today the visual message is as powerful and popular as voice,” said Rob Conway, chief executive officer of the GSM Association.
Emphasizing the messaging aspect of the service, VoiceStream struck a deal with Motorola Inc. to use its V100 Personal Communicators in addition to conventional wireless handsets to send messages. The V100 includes a mini-QWERTY keyboard, similar to Motorola’s PageWriter messaging devices, plus traditional wireless phone functionality operating on VoiceStream’s nationwide GSM network. The phone works through an ear-piece inserted into the side of the device.
The V100 also includes a built-in mini-browser, VoiceNotes enabling the user to record messages or phone calls and supports voice-recognition dialing in multiple languages, including English, French, Spanish and Portuguese.
“The Motorola V100 was designed specifically for the growing number of consumers driving the text messaging trend,” said Miguel Pellon, vice president and general manager of wireless messaging for Motorola. “With more than 15 billion SMS text messages sent each month, worldwide, consumers were asking for a product that would simplify the text-entry method that is currently available with traditional cellular phones.”
Jo Posti, public relations manager for messaging products at Motorola, said the V100 was introduced in Europe last October through GSM operators and was selling very well.
While acceptance of SMS in Europe is unquestioned, the U.S. market has yet to take up the cause. Some think that has had more to do with wireless devices than with the usefulness of the service.
“In Europe they are more dependent on mobile devices than we are in the U.S.,” noted Rob Hegblom, senior analyst with the Strategis Group.
Sears noted the success of Research In Motion Ltd.’s BlackBerry devices show that if provided with a device that allows users to easily send messages, rather than fumbling with a keypad, SMS acceptance will grow.
“RIM proved that if you are going to do high data input you need to have a QWERTY keyboard,” Sears explained. “While a majority of SMS happens in Europe, more messaging happens in the U.S. than the rest of the world, it is just with e-mail messaging instead of SMS.”
Hegblom said that while he expects the Ping Pong service and V100 device to be fairly popular, pricing might prove to be a determining factor in the success of the service.
VoiceStream will offer rate plans for Ping Pong starting at $25 per month for 500 text messages and 100 anytime voice minutes. Plans emphasis the text nature of the service over traditional rate plans. The V100 device is expected to retail for $200, with customers signing up by the end of July receiving a $50 rebate.
“We already have entry-level voice service plans for $20 per month,” Sears said. “For an additional $5, customers will receive messaging and additional voice minutes.”
