| Text Taking the US by storm |
| Sunday, 30 November 2003 | |
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Revolution December 2003 - Americans are renowned for embracing new ideas and being at the forefront of new technologies, the Internet being the perfect example. The situation is slightly different however with mobile. In comparison with Asia and Europe, the US has lagged behind in terms of its usage of mobile and especially the phenomenon of text messaging. Now the tide is turning. A US mobile revolution is taking grip, but this time from a different source. This development is being led not by consumers, but the industry. If we look at how text messaging developed in Europe, we'll quickly understand that although it was a medium never intended for commercial use, it's usage was driven by consumers.Text messaging began developing as a peer-to-peer phenomenon in the UK in '95. Never intended as a peer-to-peer communication channel and never advertised as one, SMS was invented in 1992 as a means for mobile technicians to communicate while working in the field. When the networks opened up, enabling consumers to send messages to subscribers on different networks, SMS began to spread like wild fire. The lack of pricing structure for SMS in the early days meant it was free to text, adding more fuel to the fire. When a pricing structure was finally introduced, the standard tariff of 10-12 pence was still affordable and didn't deter teens from becoming text crazy. Text messaging became a fully established underground teen phenomenon by the late 90's and today UK networks send over 1.4 billion texts a month. By contrast, in the US, everything has worked against text messaging from a consumers' perspective. Problems have included the two competing and until recently, non-compatible technology standards: CDMA and GSM. The lack of interoperability between the six network operators that make up 90% of the market, again until recently, made texting between networks impossible. US consumers can now text different networks, but to educate an entire audience that they can do this is no trivial task. By contrast, in the UK, we've reached a stage where consumers are educated enough to handle differential pricing for on and off-network texting (e.g. 'text another Virgin Mobile customer for 3p'), American customers are still learning that they CAN text other networks. Another hindrance is that cell phone users often have to pay when they both send and receive a message. Only AT&T Wireless doesn't charge for receiving messages. However, this doesn't get around the fact that most networks' customers still pay to receive messages from other mobile subscribers. Beyond these technical and commercial issues, the last consideration for US subscribers is a cultural one. With most tariffs giving upwards of 1,000 cross network voice call minutes per month, many Americans might question why they would want to send a text message for potentially an additional 10¢ per message. So, because of technical and pricing issues on many levels, the US mobile revolution is not a consumer driven phenomenon. Operators and brands are, however, for different reasons keen to make the text-messaging trend happen. US operators have a huge incentive to drive the text messaging amongst their subscribers. Their European counterparts are generating up to 20% of revenues from data traffic. Growth in US voice revenues is slowing, so operators are looking for other sources of revenue. Separately, now that the technical and pricing issues that hindered consumers from texting before are solved, brands such as Coca-Cola and Pop Idol, which have run successful campaigns on this side of the pond, are keen to enjoy the same success in the States. We encourage UK marketers to talk to their colleagues in the states about the potential opportunities with mobile, and help lead the US mobile revolution! © Copyright Flytxt Ltd 2006. Unauthorized use of any content constitutes a material breach. |
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