Wireless

February 24, 2005
Mobile Multimedia: Is it really delivering?

Geetanjali Wadhwa & Pradeep Chakraborty

Though the initial uptake of MMS has not been large in the early phases, its capability in providing a canvas to create compelling services and deliver those at a moment's notice is definitely a key driver for mobile data growth.

BANGALORE, NEW DELHI AND UNITED KINGDOM -- Connoisseurs of MMS might disagree, but it is still some way off before becoming ubiquitous like SMS. Sure, there are many MMS-enabled handsets available in the market. People are even buying those handsets. However, it needs to be carefully examined whether those devices are actually being used to send MMS or is it only the oomph factor associated with brandishing the latest handsets among friends that seems to be driving handset users! Rather, how much is MMS really driving mobile data growth, the main reason it came into being!

MMS as driver of mobile data
Mark Willingham, vice president of marketing, HeyAnita, a leading provider of enhanced messaging solutions to the global telecom industry, said, there was no doubt that the promise for MMS to drive data growth was real. "What is not known at this time is the timing and extent to which this growth will actually be realized. The biggest issues here are usability (speed, simplicity of use, etc.), interoperability (across handsets and operator networks) and the ability to deliver applications that address real market needs," he added. Certainly, 2004 saw more frustration than success for MMS; especially in Western Europe, where the end-users felt that the solutions did not meet their expectations.

Mobile data growth is an essential goal for mobile operators. However, this goal may not necessarily be aligned with delivering solutions that 'delight' their subscribers. Willingham said: "Quite frankly, subscribers - for the most part - do not care about transport. What they care about is the experience and value of services. MMS will have a chance to prove itself over the next few years. However, mobile operators need to make sure that the solutions being offered are ready-for-primetime and not deployed prematurely. If deployed before they are ready, MMS solutions would only result in more subscriber frustrations and this won't drive mobile data growth."

Samuel Selvakumar, operations director, Hutchison Essar South Ltd., a leading mobile operator, felt that MMS was driving a significant growth in usage of data services. He noted: "Rapid growth of MMS and GPRS-enabled handsets, and a quantum jump in the magnitude and quality of content are the key factors in the increasing popularity of data services. Entertainment content, sports-related information, handset-related downloads, etc., are some of the most sought after services by consumers."

According to Satish Kejriwal, COO, Cellnext Solutions Ltd., a leading Indian provider of mobile Internet solutions, MMS was a broad service environment that enables many things. Mobile data growth was evidently increasing with the success and huge usage of SMS. The natural evolution goes toward sounds, images and videos, i.e., MMS. "Though the initial uptake is not large due to the early phases, the capability of MMS in providing a canvas to create compelling services and deliver those at a moment's notice is definitely a key driver for mobile data growth," he opined.

Ramakrishna Dutt, managing director, Quasar Innovations Pvt. Ltd., stated that MMS was one of the main factors behind the increase in mobile data growth. He said: "MMS enables rich content to be created in messaging. It can also function as a highly versatile platform for mobile applications and services. The ability of MMS to deliver as well as store video clips, audio clips, high-quality images, etc., opens up wide vistas for personal and corporate use. It is reshaping the mobile communication landscape by making it more personal, versatile and expressive then before." Quasar is developing a GSM/GPRS phone.

Personalisation, music key drivers
If MMS is reshaping the mobile communication landscape, let us examine the key drivers. Selvakumar at Hutch said that relevant and rich content were simply the drivers of MMS. In any specific category - music, news or sports - the consumer today clearly wanted simplicity of access and choice of content. Specifically, the most popular content categories were movies, music, cricket and games. So far, content was very generic. However, this year onward, there would be a lot of personalisation of content.

Quasar's Dutt agreed, adding that personalization and music were proving to be the key drivers of MMS. Audio clips, video clips and image transmission formed the bulk of today's MMS, while other material from news events, entertainment and sports were gaining edge. Corporates were using it increasingly by sharing Excel sheets, graphs and PowerPoint slides. "MMS should be positioned as a utility in the form of a field device by building applications that enhance value proposition, for example, MMS is used as a proof of delivery. This will make its usage user-driven and establish its corporate use," he added.

According to Kejriwal at Cellnext, the mobile phone market had achieved significant penetration and most users were well accustomed in using phones for services other than voice. Most operators migrated their networks to GPRS as well. Mobile handsets offering MMS compatibility were currently available in the market at affordable prices. In fact, all elements seem to be in place to drive the MMS platform perfectly. Regarding personalization, he said: "Personalisation is something I would relate even to SMS. I view it as a strategy to deliver services to the customers and not as a key driver for MMS. Music is specific to MMS. It is one of the several ways to make MMS attractive and interesting. It will definitely have high demand."

HeyAnita's Willingham added that the question about key drivers for MMS would likely evoke different answers from different people, including mobile operators. "Picture messaging is getting a lot of attention. However, I am not sure how many pictures are being sent versus being stored on the mobile phone for viewing. Recent focus groups that HeyAnita conducted in the UK indicated that the enthusiasm to send pictures from camera phones seemed to drop after 30-60 days. While subscribers provided many reasons, a major issue was the rate of failure experienced when trying to send a picture to another mobile phone," he added. Many users felt extremely frustrated that they were promised something that could not be delivered. When it comes to using MMS for person-to-person (P2P) communications, and in this case, messaging, mobile operators must be resolved to not deliver too much too soon. If the solutions won't work across every phone and every network, it was likely that they won't drive sustainable revenues, he cautioned.

Challenges before operators
Indeed, operators faced a myriad of problems, before delivering MMS successfully. Dutt listed several issues, such as low penetration of GPRS and 3G-enabled handsets; problems with in-country MMS interconnect; lack of interoperability among different MMS-enabled mobile devices; interoperability issues between GSM and CDMA devices; proprietary MMSC (Multimedia Messaging Service Center) technology, and as there are no standards to be followed, each service provider had to develop its own MMSC standard; CDMA service providers do not have legal status to offer MMS on their handsets; prohibitive cost and variation in pricing models of different operators; and low bandwidth.

He advised: "Operators should go for transcoding solutions that enable even consumers not having high-end video handsets to send and receive MMS. Establishment of high-speed connectivity like 3G networks would solve the speed delays. Reduced costs of MMS-enabled handset, as well as making the use of MMS more affordable would also increase its popularity."

Selvakumar highlighted the availability of low-cost MMS and GPRS handsets, penetration of entry-level handsets in smaller markets outside main cities, and interoperability with national and international service providers as some of the key challenges that would dictate the further penetration and usage of MMS.

Kejriwal said technology should not be the major focus for operators and they should have a clear signal, not just for MMS, but for any service, they wished to deliver. They should focus on providing affordable, interesting and profitable applications. He added: "It means the operators would need partners with content, who can work with them to create distinguished advantage. The right segmentation of customers, right content and user-friendly billing procedures would give them an edge. Operators are presently facing problems on how to bill the customers for different categories of content. Plus, all handsets in the market with MMS function may not support MMS standards."

A major key to the success of MMS was to ensure that subscribers were thrilled with its experience, noted Willingham. While this may seem obvious, it was not always the primary driver. For example, a necessity for deploying MMS today - before it worked across all devices and networks - was driven by the need for operators to drive data transport in their networks; and not because everyone was confident that end-users would have a great experience. "MMS provides the ability for operators to potentially deploy some great new applications and provide alternate reasons, other than voice calls, for subscribers to use mobile phones. However, the potential for short-term failure is real and we must all recognize that users are tired of being promised solutions that do not exceed their expectations. This is particularly true when it comes to the messaging solutions," he said.

Most subscribers did not know or cared which models of mobile phones their friends or co-workers had, nor did they necessarily know which network these people were on. All they knew was, they 'bought' a solution from their mobile operator and if it did not deliver the way they expected, it would fail. If mobile operators wanted to ensure the success of MMS, they must not lose focus of their customers' experience, stressed Willingham.

So, what does this really mean? There is a need to focus on the user experience first and the transport later. "The biggest issues here are usability (speed, simplicity of use, etc.), interoperability (across handsets and operator networks) and the ability to deliver applications that address real market needs. If solutions can be provided today that address these issues, even if they do not use MMS, then this is what the operators should be deploying. In this case, MMS can then be used to provide for increased transport efficiency and higher profit margins once subscribers have embraced products for their real value. This is the way to ensure the success of MMS," he noted.

Easy user interface, handset flexibility key
Evidently, issues such as easy user interface and flexibility on the handset are significant. Stressing their importance, Willingham said that without simplicity of use, solutions would not be adopted by the masses. He pointed out: "A good example is the VCR. While these devices were mainstream for over 30 years, they were mostly used for viewing movies and not recording them. The complexity of programming the VCR to record limited its usefulness in this regard to a small percentage of overall users. Simplicity is key if the industry wants non-technical oriented subscribers to adopt next-generation services on mobile handsets. Additionally, interoperability devices and networks are a necessity if the operators want the solutions to reach critical mass."

The others agreed as well. Selvakumar said that easy user interface and flexibility on the handset were the two critical pillars to increase penetration and usage of the service. International experience had clearly indicated a direct correlation between the simplicity of information access and usage of that specific service. Dutt noted that easy user interface and flexibility on the handset allowed the user to discover and experiment with MMS, which led to increased usage. He said: "This increased usage becomes a key driver in increased ARPU for the operator. Ease of use, time and number of actions taken to prepare and send the MMS in the handset determines the frequency of MMS service usage by the user." Kejriwal commented that device simplicity and ease of use were of paramount significance. There was huge enthusiasm around MMS and there have been various debates/discussions on how to repeat the success of SMS with MMS. The foremost factor would be to build a similar user experience that was marked with easy user interface and flexibility on the handset.

Current status of MMS in India
So, what is the status of mobile multimedia messaging in India? Are operators able to make money out of it? Cellnext's Kejriwal said MMS in India was only at the tip of the iceberg. "It is still at the nascent stage of its lifecycle. The cost of MMS is a driving factor. An MMS is around three times more expensive than an SMS. However, the value it brings will definitely fetch tremendous user requests. Users never pay for technology, but pay for the functionality they receive and the value they perceive with it. MMS is in the initial take-off period and promises huge volumes in near future. The industry has a high revenue-generating platform with MMS," he felt. Hutch's Selvakumar said that the current challenge was to increase the penetration and usage of these services. MMS was currently being offered to consumers free of charge.

Dutt remarked that as of now, the share of MMS in the revenues of operators was miniscule in India. It could well prove to be an additional source of revenue for them. Revenue from voice-based services was under severe pressure. Though the revenue from SMS was significant, the operators required an alternative revenue stream. This was where data services came into picture. For operators to make money out of MMS, they would have to resort to more applications to personal kinds of messaging, instead of person-to-person, personalized, feature-rich messages. "Application to person is a mass market service, where transmission costs have to be competitive. They can sell bulk transmission capacity to content providers," he added. Operators would also require to arrive at a uniform pricing policy and take steps to decrease the cost of MMS, making it more appealing to consumers. The new and varied use for this service like stock analysis, slide shows for corporates, etc., would make it more profitable.

Improving operators' ARPUs
Regarding the steps that operators need to take to improve ARPUs, Selvakumar listed factors such as the availability of compatible handsets, exhaustive and high-quality content, localization and personalization, easy access of applications and an overall, a higher user experience. These, he said, would deliver higher penetration, usage and increasing revenues. Kejriwal added that the market acceptance of SMS could be built on, as it was a big positive. New and innovative services like gaming, ticketing, picture messaging, dating, banking, etc., would do the trick. Operators could dramatically improve their ARPUs, if they concentrated on giving people what they wanted, and when and where they wanted, without overcoming their inertia. Application/content providers would have to play a major role here.

Dutt observed that operators should build applications that provided value addition to the consumers, focus on conversion from prepaid to postpaid, provide killer applications that would hook consumers, leading to an increase in revenues, filtering good and bad quality subscribers, increased handset penetration, increased bandwidth, and attract content providers like TV companies.

Regarding individual experiences with MMS, Hutch's Selvakumar said the carrier constantly focused on innovative and user-friendly applications for customers. It has a large and dedicated in-house team that delivered new applications and richer content extremely rapidly. A few of Hutch's successful applications, which were first of its kind in India, are:

• Basic MMS: Special moments as full-colour MMS. Users can send an MMS to Hutch/Orange, or other operators across India. They can view it as an MMS if they have MMS-enabled phones, while the rest can receive an SMS containing a link, through which they can view their MMS on the Internet.
• Click Print: This involves not just clicking a special picture, but printing it out at any Kodak outlet on a remote control basis. As a Hutch subscriber, users can click photos on their phones and send them to Kodak, who in turn would have these pictures printed and delivered within five days, anywhere in the country.
• MCard: Sending and receiving an animated greeting through MCards. These are available for customers to download on a variety of occasions throughout the year.

Cellnext's Kejriwal said the vendor offered a complete MMS suite to operators and enterprises. He said: "Our suite does not limit MMS to just enhanced messaging. We have a wide MMS portfolio that allows the users to directly download the chosen content from the Web over their mobile. We provide operators with an interface from where they can choose any content from the Internet to broadcast to selected recipients. The uniqueness also comes with our offering the over-the-air (OTA) settings where the users with such configuration can browse the Web from their mobile directly and pull the MMS content of their choice."

He added: "There has been a huge demand from our clients for our MMS applications and content. We see a high usage from consumers all over the country for this in the coming months and it is surely going to be one of key driving factors for mobile data growth."

Willingham said that while HeyAnita focused on next-generation enhanced mobile messaging solutions, its products were driven first by end-user needs and feedback, and secondly by transport technologies. The reason is, new solutions served provide zero value to vendors and operators if they are destined to frustrate the users. The primary concern should be on providing solutions that delivered as promised for every subscriber who chose to try them. The method of transport should be secondary to addressing the end-user needs and exceeding their expectations.

He said: "Our rapid message service (RMS) offering, which is a handset-independent messaging solution, enables mobile phone users to send and receive voice messages regardless of carrier network or handset technology. It is extremely simple to use for subscribers, yet provides operators with a roadmap for deploying via circuit-switch as well as data. With this approach, for each particular deployment, the backend transport can change as necessitated by market adoption and become a revenue driver instead of a hurdle to adoption. We did our best to align RMS with the current stage of the mobile market, while architecting the solution to leverage solutions such as MMS as they mature and become interoperable."