Blurred view for picture messaging

Pictures could be fun on a night out with the girls

By Emma Clark BBC News Online business staff

Just recently it has become almost impossible to avoid pictures of Andre Agassi and Steffi Graf.

The tennis wunder-couple are everywhere - bus shelters, televisions, newspapers - and as Christmas approaches, it could get worse.

Unavoidable?

You would be forgiven for thinking they planned a mixed doubles comeback, but they are in fact promoting T-Mobile's new picture-messaging service.

With the right handset, the service allows customers to take pictures and send them to each other.

Mobile phone operator T-Mobile is hoping Brits will become so inspired by Andre and Steffi's mobile picture antics that they will fork out £20 ($31; 31.4 euros) a month to join them.

T-Mobile is not alone - Orange has also launched a picture-messaging service and Vodafone will follow soon, but is being coy about a date.

All are pinning their hopes on picture messaging to boost much-needed revenues from non-voice services.

Money to be made?

Analyst group Ovum is predicting that annual revenues from multimedia messaging (MMS) - the term for picture messaging and similar services - will reach $70bn worldwide by 2007.

Will we love or spurn the new services?

By the same year, Forrester Research forecasts that there will be 160 million of us in Europe using MMS.

But will the mobile millions adopt picture messaging as everyone is hoping, or could the new phenomena turn out to be a Wap-like flop?

"There is the danger of hyping the hell out of it," says Gartner Group's senior analyst Ben Wood.

"But I believe with picture messaging the user experience and expectation will match."

The hype once associated with Wap services disappointed because internet access from mobile phones proved patchy and slow.

Despite Mr Wood's optimism, however, teething problems with picture messaging are emerging.

Rivals

Already the competition between Orange and T-Online has led to questions over pricing.

Orange believes its 40p-a-message charge will prove more attractive than T-Online's flat monthly fee of £20.

MMS forecasts (Europe)

End of 2003: 7.5m users of MMS

2004: 14% of mobile users will use MMS

End of 2007: about 50% (160m users) will use MMS

Current text (SMS) users: close to 70%

Source: Forrester

"My suspicion is that T-Mobile couldn't get their billing system in place in time [in their race to get to market first]," says Suzanne Snygg, Orange's senior products manager.

Tracking and billing for separate picture messages is more complex than the system used to trace the humble text message.

And for the present, analysts believe per-message pricing will be more effective in persuading consumers to start sending picture messages.

"Asking people to commit to spending £20 when they don't really know if they need it - well I don't think it's smart really," says Michelle de Lussanet, an analyst at Forrester Research.

T-Mobile argues that its flat fee offers better value than Orange - and it does if customers want to send more than 50 picture messages a month.

Picture pals

But the crucial part of the equation is building up a critical mass of users to justify such heavy usage.

The Nokia phone includes a camera lens

In continental Europe, operators such as Telecom Italia and Greece's Stet Hellas are offering free trials to tempt users to sign up.

Mr Wood believes the UK operators have so far opted for a paying approach so as not to devalue the service.

The trade-off perhaps is a slower build-up of people-to-people picture messaging in the UK.

At the moment, anyone with a picture-taking mobile phone will spend most of their time sending images to other people's e-mails.

"I believe picture messaging will be successful, but whether that will be at the end of this year, I don't know," says Gartner's Mr Wood.

"I think momentum will build up at the beginning of next year and then, by the end of 2003, there will be a critical mass of users in the marketplace."

Last-minute hitches

Before picture messaging can become mass-market, operators also have to iron out "interoperability" issues, where users cannot send messages to different networks.

The SonyEricsson phone has a clip-on-camera

T-Online says discussions with other operators are "progressing", while Orange promises to have forged agreements by early next year.

But it begs the question as to why this was not resolved before the launch of services.

Handset makers are also racing to offer a greater choice of handsets that can support MMS before Christmas.

Currently, pioneers are limited to two handsets on the market - the SonyEricsson T68i or the Nokia 7650 - both of which cost about £200.

To date, the pictures have not always impressed.

"The picture quality is horrible," says Forrester's Ms de Lussanet of her SonyEricsson handset.

Seasonal greetings?

This year's Christmas present-giving will be the first test of consumer appetite for picture messaging.

All I want for Christmas is a brand new phone?

Mobile phone companies will have high hopes, particularly after the runaway success of a picture service offered by Vodafone's J-Phone subsidiary in Japan.

A positive reception in Europe could also provide a vital stepping stone to more sophisticated third-generation (3G) services, such as film clips and fast connections to the internet.

But the stakes are high - if picture messaging fails to thrill, it could deal yet another blow to the mobile community's 3G aspirations.

"MMS is expected to break the Wap losing streak, but yeah it's make or break - I accept that," admits Ms de Lussanet.