The consumer market for mobile content services - A discussion paper on SMS and the transfer to 3G - PTS-ER-2002:21
29/08/2002
This Report deals with mobile content services for the consumer market. It aims to describe the current market and its impact on the transfer to 3G.
The Report is based on public information and interviews with actors in the content market. The content services dealt with by the Report and interviews are limited to SMS applications. Interviews were conducted in total with eleven actors during February and March 2002. The interviews aimed to obtain an impression of how the various actors perceive the effect of the prevailing market conditions on development and growth.
One of the starting points for this Report is that mobile content services that are used today familiarises users with the facilities. This affects the users’ opportunities as well as their interest in assimilating new, more advanced content services, for example those that it is anticipated will be brought with the next generation of mobile telephony. The services in the market that are being developed today create user patterns that will influence the transfer to the next generation of mobile telephony. PTS is for this reason following the developments within the field of mobile content services.
Mobile content services are sold and provided to the end user by several actors – mobile network operators, third-party operators, content aggregators (i.e. mobile applications infrastructure providers) and various content suppliers. The actors approach users through television, newspapers and Internet portals. There are a number of different services. Some examples include ring tones, games, directory enquiries, weather forecasts, voting services, share prices, horoscopes and logotypes. There are also signs that it is primarily entertainment services that are selling.
The services are paid by Premium SMS or premium rate call. Premium SMS is SMS with an increased tariff. A premium rate call is a call with an increased tariff. Premium SMS is in this context simpler for the user, but access to and thereby the conditions for Premium SMS are controlled by the mobile network operators. These actors also have different preconditions for charging the user, where the mobile network operators and third-party operators have a billing relationship with the users. This influences competition, the range and the opportunities of the actors to develop services.
The current market for mobile content services shows signs of establishment thresholds, both as limitations to diversity and service development. It is therefore not a properly functioning market. The result is that the users do not get the best services possible at fair prices. This in its turn means that use is less than it could have been. Lower use leads to less knowledge, and poorer opportunities for the users to make use of new content services. A functioning market for mobile content services today would therefore facilitate the introduction of the next generation of mobile telephony.