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All information current as of 19:27:28 Pacific Time, Monday, 21 February 2005.

Value-Added Services in Europe: The Transition from SMS to Wireless Internet

   by Yankee Group

    01 November, 1999


   Available for download now

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Editorial description(s):

Download Description
In the face of increasing competition and declining revenue per subscriber, operators are pinning their hopes on value-added services (VAS) to increase usage and customer loyalty, attract new market segments and differentiate their service offerings. After years of disappointing uptake, there is finally evidence of demand for VAS: short message service (SMS), in particular, has really taken off during the last 12 months. The GSM Memorandum of Understanding (MoU) now estimates there are more than 2 billion short messages sent per month in Europe. SMS usage today is driven by the youth and prepaid markets, which take advantage of this low-cost form of communication. More that 90% of SMS traffic is still accounted for by simple text messaging. Nevertheless, in some countries we are starting to see significant demand for SMS information services. This market has been stimulated by the deployment of the SIM Application Toolkit (STK), which greatly enhances the ease-of-use of information. More than 20 operators around Europe now support the STK. Banking services in particular have become more sophisticated and are no longer confined to basic functionality such as checking account details and viewing previous transactions. More advanced services like bill payment, funds transfers and e-cash reloads are now offered or are being tested. More than 15 operators in Europe are now either testing or have commercially launched Unified Messaging (UM) services. What's driving this interest is the desire to stimulate customer usage, differentiate service and offer the one-stop communications shop, with significant demand coming from operators looking to integrate their ISP and cellular operations. The availability of new WAP-based phones—offering more user-friendly, menu-based interfaces for retrieving messages—and the development of wireless portals, is also driving demand. Tecnomen, one of the leading UM vendors in Europe, and Telenor, for example, have been running UM trials with early WAP technology since Autumn 1998. Omnitel, in Italy, is currently testing UM from Comverse and plans to make it available to WAP customers in early 2000. (Note: All references to currency are in U.S. dollars unless otherwise specified.)

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