Monday, January 29, 2001		Article

Mobile messaging takes off
By John Cassy

RUF2T? AFAIK IL BL8, PCM. The language may look like gobbledegook but it is fuelling business worth nearly 4 billion pounds sterling a year in profits to Europe’s mobile phone operators.

The apparent nonsense is a series of terminologies developed by mobile users for text messaging. It reads: "Are you free tonight? As far as I know, I am going to be late. Please call me." It is one of dozens of shorthand ways that young people are using to stay in touch on their mobiles.

Figures over the next few days from the leading networks are expected to confirm that mobile phones were the most popular gift at Christmas and delivered a further boost to text messaging, the fastest growing mobile service in Europe.

The so-called short messaging service (SMS) allows the exchange of up to 160 characters between mobile phones. Last month, an estimated 20 billion text messages were sent worldwide, and a seven-fold increase since December 1999.

The service is mostly used by tech-savvy types aged 24 or less who are attracted by the low cost and the fact that what they have to say doesn’t necessarily require a full telephone conversation.

On Virgin Mobile, the average customer sends and receives 20 to 40 messages per month, according to spokesman Steven Day. Several heavy users send up to 3,000 a month — or 100 per day. "In the last two years mobile messaging has really taken off," said Mr Day.

"The youth market is the heaviest user. There have even been instances of kids taking their mobiles into school exams and text messaging each other the answers to test questions."

The popularity of text messaging has delivered an unlikely windfall for mobile phone network operators.

The technology was designed almost as an afterthought and it was initially targeted at the corporate market. Businesses were at first unimpressed but are now starting to use it to keep in touch with colleagues and transmit company announcements.

On the other hand consumers took to the medium immediately. Each message costs the user about US $ 0.15 to send and nothing to receive. Margins can be as high as 90 per cent for some operators. "European carriers make around Euros 6bn (US $ 5.7 billion) from SMS each year but three years ago it was a zero euro industry," said Joe Cunningham, head of wireless strategy at software group Logica.

Popularity is likely to wane slightly from spring when networks are expected to introduce an estimated 3p charge to connect users’ messages to operators other than their own.

The increase is unlikely to put off marketing companies who have started to understand the value of being able to message adverts and promotions direct to consumers’ hands.

A mobile marketing firm recently caused mayhem in the Lakeside shopping centre in Thurrock just outside London, when it sent out a "location-sensitive" text message to shoppers offering a free pair of Reebok trainers to whoever turned up at a new shop with their phone. The store manager was inundated with visitors and most were turned away empty-handed.

Worldpop, the cross-media pop and dance music portal, piloted a successful text messaging marketing campaign on Ibiza this summer. More than 3,000 holiday makers signed up to received messaged offers of reduced entry into nightclubs in return for also being sent a few adverts from firms like Durex condoms, the Ministry of Sound nightclubs and budget airline Go, a Worldpop spokesman said.

Amnesty International is harnessing text messages to apply speedy pressure on Governments to release political prisoners. Instead of physically signing a petition supporters can text-message their support as and when new instances of human rights violations and torture are highlighted by the pressure group.

Logica has been one of the biggest British beneficiaries as a result of providing the technology platforms that enable network operators like Orange and One2One to send and receive text messages.

The systems cost tens of millions of pounds to install but pay for themselves in about 12 weeks, said Logica’s Mr Cunningham.

— By arrangement with The Guardian