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Saturday, 21 September, 2002, 07:51 GMT 08:51 UK
Phone firms get the mobile message

SonyEricsson T68i,TMobile
Camera phones are starting to appear
British mobile phone firms risk confusing and alienating key customers for their new multimedia services.

Almost every mobile phone company has its own tariffs and ways of charging for the swapping of music and images between phones.

To make matters worse, the largest group of mobile phone users, who pay before they call, are currently excluded from using these new services.

And surveys show that unless the costs of multimedia handsets and services drop significantly, the groups most likely to use them may never sign up.

Exclusive club

Consumers considering using multimedia messages (MMS) on their mobile phones had better be prepared to spend a lot of money to join in.

T-Mobile charges
20 per month for up to 10 megabytes of MMS
Handsets that can handle the images, icons, improved ringtones and data services of MMS are expensive.

With T-Mobile, the SonyEricsson T68 phone with camera attached is currently 199.98. MMS phones without cameras are also pricey.

Once you have bought the handset, you have to buy a data bundle that lets you swap images and sounds with others and some make you pay every time you send an MMS.

Prices vary widely. T-Mobile charges a flat 20 per month for unlimited multimedia messaging. Others sell data in chunks and roll over spare capacity to following months. Some networks levy the monthly data charge whether you use your allowance or not.

Key groups

And despite the fact that 65% of all mobile customers are pre-pay, currently no network lets them use MMS.

According to research by JD Power & Associates, this means that the mobile phone firms are excluding at least one key customer group - teenagers.

Orange charges
4 for 500 kilobytes and 40 pence per MMS
Figures collected by JD Power show that, on average, mobile users send 16 text messages per month. By contrast, teenagers send 42.

They are also voracious users of mobile information services. JD Power found that 26% of customers who can browse Wap pages do so. With teenagers the figure is 46%.

Teenagers are also heavy users of ringtones with 56% downloading new ones; the average across all users is 33%.

It is a fair bet that if they had the chance to use multimedia services, this key group would. At the moment, they are excluded.

Big bills

"Operators could offer price bands combined with pay-as-you-go services then you have access to the teenage market which is big," said Mike Altendorf, director of services firm Conchango. "They are going to find it cost prohibitive to get into because of the cost of MMS and the handsets."

Mr Altendorf said operators were adopting very different ways of charging. Some, such as Westel in Hungary, have separate prices depending on the size of a message.

Vodafone charges
Not launched MMS yet but charges 7.49 per month for 1megabyte of data
Stephen Newton, European president of billing software company Convergys, said there might be good reasons why operators have different charging systems.

"It depends on the billing infrastructure they have got," he said, "They simply may not be able to do sophisticated billing."

Mr Newton said the advent of multimedia messaging and new ways of transporting data around mobile networks placed a significant burden on mobile firms.

Message sent

The advent of packet radio services, which split messages into small pieces before sending them across the network, means that customers are now charged for what they do rather than how long it takes them to do it.

MM O2 charges
Yet to launch MMS but basic tariff is 7.99 per month for 1mb
This requires that operators be able to watch what a customer does to work out if a message arrived to ensure they are not charged twice.

They also have to watch how much data they are sending so they can bump up the price or cut them off if they exceed a credit or data limit.

Many operators were only just starting to upgrade their billing systems, said Mr Newton.

Mobile firms also have to be able to track what people are doing to ensure that their partners providing images, video or music clips get their share of what customers are paying.

The market for mobile phones only really took off when operators segmented the market and offered packages tailored for groups of users, said Mr Newton and he expects to see similar packages appearing soon.

If the operators do not get this message, they are the ones that could end up paying.

See also:

03 Sep 02 | Business
02 Aug 02 | Technology
15 Jul 02 | dot life
08 Jul 02 | dot life
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