|
|
Submitted by Industry Comment on Wed, 12 Dec 2007 12:39 |
Mike Hawkes, CTO of Broca Communications and m-commerce director of the Mobile Data Association (MDA), discusses the usability of SMS, its future potential and why companies are snubbing it as a revenue generating tool.
We have all read about the analysts reports predicting the death of SMS. Most recently, it was Gartner that claimed SMS will become extinct within the next decade as users switch to wireless emailing. What lays in the future for SMS remains to be seen, but in my opinion the medium is likely to evolve and close the gap between plain SMS as we know it today and what WAP has promised to become, whereby businesses will start to offer a range of products and services via branded, targeted SMS.
Hunting For Mobile WiFi
There have been many attempts to introduce technologies that would recreate the Internet experience on the handset. Despite businesses' efforts to reach new customers via WAP, the medium has never really taken off as expected amongst consumers. And now the buzz is around mobile WiFi. Admittedly, mobile WiFi has great potential, but whether it really takes off, depends on whether, or perhaps when, WiFi hotspots will become as widely spread as originally predicted.
So in a world that has shunned WAP and cannot yet guarantee a fully operative WiFi system, how can businesses take advantage of the mobile channel to communicate more effectively with their customers and generate extra revenues through m-commerce? Whatever the reasons behind the failure of WAP and mobile WiFi, there are opportunities for businesses to increase revenues through the use of SMS.
Thorough Understanding
Despite Gartner’s ominous predictions, SMS is not showing any signs of dying out – on the contrary. According to statistics by the Mobile Data Association, in May this year, 4.5 billion text messages were sent in the UK alone. That equals 150 million text messages per day, and makes SMS the most popular application of mobiles after voice. Indeed, New Year’s Eve 2006/7 saw 214 million messages sent in the UK – the highest daily level ever recorded by the MDA.
The fact that consumers have so far been using SMS mostly for texting amongst family and friends is perhaps the greatest advantage that SMS has over other mobile applications: consumers have developed a thorough understanding of how SMS works when using it for informal texting – and this is something that operators or mobile service providers seem to ignore. Despite the unparalleled popularity of SMS, mobile operators and service providers still seem to snub it in favour of other data services.
Missed Revenue
Recent research conducted by Informa Telecoms & Media estimated that mobile operators are missing out on about £2.5 billion per year from lost opportunities in value-added SMS messaging. Why do operators and business fail to see the potential of SMS as a revenue generating tool? The greatest advantage of SMS over other mobile applications stems from its usability. The main reason why it has become so widely adopted amongst consumers is because of its cost-effectiveness and because of its level of immediacy, which we have not yet seen in other mobile media.
WAP Illusion
When comparing SMS with WAP, for example, it is apparent that SMS is a more user-friendly medium: it is not uncommon that when a user buys a new handset, WAP is not automatically installed on the device, but needs to be set up separately. How easy this is depends on the operator and on the handset, but a friend of mine recently spent an hour and a half on the phone to his mobile operator to configure his handset for WAP and be able to use WAP-based services. Not only is WAP still regarded a non-standard feature by some operators, but once a user has finally been able to set up WAP on their handset, they are likely to become disillusioned by the poor quality of websites that are not designed to be used with WAP as well as the cost of accessing and downloading material through WAP.
As long as the problems with WAP and WiFi remain unsolved, businesses should look into other alternatives to turn the mobile into a functional and cost-effective sales channel. Making products and services available via SMS would enable businesses to reach a wider audience and increase revenues through the sale of perishable goods in particular. Ticket sales, special promotions and auctions are examples of m-commerce activities, which would benefit from the unprecedented reach and immediate nature of SMS. For consumers, being able to buy goods and service whenever and wherever they wish, conveniently and cost-effectively, would bring freedom and reassurance that the best deals are always at their fingertips. Additionally, as the technology to prevent unauthorised individuals from gaining access to consumers’ contact details and financial information already exists, now is the ideal time for businesses to start reaping the benefits of SMS-based commerce.
About Mike Hawkes, CTO, Broca Communications
Mike is a skilled strategy architect and programme manager with extensive technical and commercial experience. In a previous role as technical director at Signal Radio, Mike led the process of transforming the station from an analogue to digital a broadcast facility. He was also responsible for the world’s first live video transmission of broadcast quality television via the Internet during the America's Cup in 1995. Mike has also been involved in developing life-critical command and control systems for the defence sector. Prior to joining Broca, Mike was the Principal Consultant at IS Integration, where he provided expert advice on strategic architecture, project troubleshooting, programme management, IT consultancy and commercial systems development. Mike is a member of numerous industry panels and an active contributor to government working groups, as well as the M-Commerce Director of the Mobile Data Association.
|
