INSTANT MESSAGING EXPERT ALLEN SCOTT ANSWERS QUESTIONS FROM THE
INDUSTRY ON HOW TO MAKE A SUCCESS OF THE SERVICE IN A MOBILE ENVIRONMENT.
By some estimates, mobile instant
messaging (MIM) traffi c volumes could
exceed those of SMS within four years. A
hugely popular desktop application, the
potential of IM on mobile phones has
been talked about for many years. But
it has been slow to gather momentum,
with traditional SMS proving suffi cient
for many people’s needs.
In this edition of Th e Debate, Allen
Scott, general manager, NeuStar Next
Generation Messaging, responds to your
questions about the strengths of MIM
and the opportunities that await it in the
market place. If you have any responses
to the discussion you see here, please
feel free to email me on mike.hibberd@
informa.com.
What has changed that will drive users
to MIM?
LL, HP Opencall
AS: Mobile IM faced similar issues to
MMS, WAP and Video: confusing pricing
and being technology-driven rather
than focused on the end user.
It seems some of these lessons have
been learned and, with the focus now on
the customer, with simpler pricing and
a simpler end-to-end user experience,
there is no doubt that it is set to take off
in a big way in 2008.
In the latter part of 2007 we saw several
operators announce impressive numbers
on mobile IM. 3 UK announced
more than a billion mobile IM’s sent in
less than a year and Vodafone Portugal
announced early success, with 100 million
IMs on its service.
NeuStar currently manages around
half a billion mobile IMs per month
and this number is growing rapidly. Th e
reality is that users are using the service
today and operators are benefi ting from
the revenues today.
Like any mobile service, IM will be
driven by simplicity and intuition. We
did not have to show people how to text.
Th ey just received one and sent one back.
Operators that make it easy for users
to discover and use the service enjoy
success. Pricing strategy, handset support
and marketing communications all
play their part. Perhaps most critical is
the viral nature of mobile IM. Like text,
you receive one and immediately want to
engage in the experience.
With half a billion users of PC IM—
and more than that number connected
to a mobile—operators off ering the service,
there is every reason to be optimistic
about the chances for mobile IM.
According to a recent KPMG survey, the
thing customers most value is attractive
pricing for the service provided.
For instant messaging, what is the main
incentive for customers to adopt the service
and what is the recommended businessstrategy
to pursue, including pricing issue?
HP, MTS-Ukraine
I am very curious about the business
model that will drive uptake of mobile
IM. We (our company) have attempted
adopting the monthly licence model
but have had very limited success. Any
insight will be invaluable.
BA, Mobileculture Nigeria (content
provider)
AS: Pricing is clearly critical. Operators
are under constant price pressure,
meaning that they need to develop
innovative new services to recoup some
of the revenue lost as services like voice
and text mature and become subject to
greater price pressure.
Th is is leading to a move away from
per unit billing. With the development
of text message bundles, mobile users
are getting more used to a monthly service
cost and less accepting of per unit
billing. Th e development of fi xed rate
tariff s for data is further evidence of this
trend and this is good news for mobile
IM and services like it.
We are seeing a number of diff erent
business models and pricing strategies
succeeding. Some operators are
30 Mobile Communications International | First for news, best for business
putting bundles of messages together,
some are charging a monthly access fee.
TIM in Italy has approached pricing by
off ering a short trial period for free and
subsequently charging a monthly access
charge. Alternatively subscribers can
pay a nominal cost for access for one
day. UK carrier 3 has off ered the service
to pay monthly customers for free.
Of course it is impossible to generalise
as there will be a number of variable
issues for every operator, from competitor’s
pricing strategies to cultural
diff erences. However, from independent
research we carried out to see what
consumers’ expectations are with pricing
mobile IM; many think there will be hidden
data charges that will appear on their
next bill. Operators need to segment and
target the right users and clearly communicate
how they will be charged upfront.
At Informa’s MIM event in Amsterdam,
NeuStar mentioned that it envisions
operators would best benefi t from a
single messaging client that provides
instant messaging and content sharing
among mobile subscribers as well as to
members of internet communities like
MSN and Yahoo.
While clearly ideal for the end user,
wouldn’t such a move stop the internet
brands from making money? Communities
need control of the end user experience
in order to sell parts of the screen
to advertisers. As far as I know this is
the main reason why Windows Live
Messenger (MSN) does not back that
strategy. What’s your take on this?
MB, Acision
AS: I am a fi rm believer that what is ideal
for the end user should not be compromised
by existing business models. To do
so will lead to user frustration and either
the failure of new services or the slowing
down of uptake. Th en everyone loses. If we
deliver what is ideal for the end user there
will be ways to generate revenue. We might
just have to think harder how to achieve it.
Th inking back to the early days of the
with
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