Network Interoperability to Enable Seamless Multimedia Messaging Services

Palo Alto, Calif. – September 29, 2003 –The lack of interoperability across major mobile network operators (MNOs), which have different technologies and varied business interests, is hampering the growth of the North American multimedia messaging services (MMS) markets.

Technological issues relating to the global system for mobile communications (GSM) and code division multiple accesses (CDMA) standards have further compounded this problem.

New analysis from Frost & Sullivan (www.frost.com), North American Multimedia Messaging (MMS) Markets, reveals that this market generated revenues worth $2.0 million in 2002 and is likely to reach $5.46 billion by 2009.

“The MNOs, having relinquished millions of dollars on short message servicing (SMS) revenues because of the interoperability issues until 2001, do not want to repeat their mistake,” says Frost & Sullivan Industry Manager Kshitij Moghe.

Rightly, MNOs are not taking any chances on MMS and have addressed most of the technical issues. With MMS being open IP-based, they are now making concerted efforts to adopt an open communications strategy across all networks to ensure smooth functioning.

However, market growth is greatly dependent on the availability and affordability of handsets that support MMS standards and specifications and have color displays and cameras.

“New devices, which are currently priced at $250 and above, must reach the $100 to $125 price point to trigger mass acceptance,” says Moghe. “Subsidized rates are one option, but the MNOs need to be careful as this strategy is expected to exert downward pressure on their profitability.”

As with short message servicing (SMS), the popularity of MMS is expected to be driven by the power of viral marketing. Premium content services over MMS such as games, ring tones, and movie clips are likely to boost revenues for market participants.

The downside of this exciting prospect is that branded content, once downloaded, can be freely distributed to other users. This violates copyright laws and adversely affects content providers.

“Digital rights management (DRM) is proving to be a major concern for the content provider community as they would like to avoid controversies similar to that of Napster’s on-line music sharing,” says Moghe.
To overcome issues related to DRM, the Open Mobile Alliance (OMA) has laid down certain specifications such as forward-locking, which are handset-based; to avoid unauthorized distribution of premium branded content.

“The market for MMS services is in its infancy today, hampered by the lack of applications, devices, and services,” says Moghe. “However, phenomenal growth is expected within a timeframe of 18 months from now; somewhere in 2005, as market participants expedite their efforts to roll-out MMS and MMS-enabled handsets.”

The following is a list of key industry participants: Airgate PCS, Alamosa Holdings, Inc., Alltel, AT&T Wireless, Bell Canada, Centennial Wireless, CenturyTel, Cingular Wireless, Comverse, Dobson Communications Corporation, Ericsson, Horizon PCS, Leap Wireless, LG, LightSurf Technologies, Inc., LogicaCMG, Midwest Wireless, Mirapoint, Motorola, Inc., Nextel, Nokia, NTELOS, Inc., Openwave, Price Communications, Inc., Qwest Communications, Rogers AT&T Wireless, Run Tones, Inc., Rural Cellular Corporation, Samsung, SchlumbergerSema, Sony-Ericsson, Southern LINC, Sprint PCS, Summus, Inc., Taral Networks, Telecorp PCS, Inc., TELUS Mobility, T-Mobile, Triton PCS, US Cellular, US Unwired, Inc., Verizon Wireless, Western Wireless Corporation

North American Multimedia Messaging (MMS) Markets is part of the Mobile Communications Coverage which includes market insights on U.S. MMS Markets and Mobile Gaming Markets .  Executive summaries and interviews are available to the press.

Frost & Sullivan, an international growth consultancy, has been supporting clients' expansion for more than four decades. Our market expertise covers a broad spectrum of industries, while our portfolio of advisory competencies include custom strategic consulting, market intelligence and management training. Our mission is to forge partnerships with our clients' management teams to deliver market insights and to create value and drive growth through innovative approaches.  Frost & Sullivan's network of consultants, industry experts, corporate trainers and support staff, spans the globe with offices in every major country.

North American Multimedia Messaging (MMS) Markets
Report: A505

Contacts:
Dustin McVey
Media Relations Executive – Americas
P: 210.247.3830
F: 210.348.1003
E: dmcvey@frost.com

Kristina Menzefricke
Media Relations Manager – Europe
+44 (0) 20 7343 8376
kristina.menzefricke@frost.com

Biswarup Banerjee
Media Relations – India
+91-44-24314263/5/6/7
bbanerjee@frost.com