Mobile IM can replicate SMS if positioned correctly

Visionagain: As mobile operators across Europe and Asia look to deploy customised (operator owned and branded) mobile IM services by the end of 2006, warns that incorrect pricing seriously throws open the possibility of MIM cannibalising SMS service revenues.

Deploying successful mobile IM services, argues that operators must carefully evaluate how MIM services will fit into their overall service portfolio and adopt the appropriate pricing strategies. While some SMS erosion will inevitably occur in the process, the right bundling and positioning of MIM with complementary services will boost overall ARPU, especially if combined with community features.

If mobile operators play their cards right with respect to pricing and marketing strategies, MIM holds significant potential worldwide. In Europe alone, visiongain estimates that compelling MIM services will generate almost $1.5 billion in service revenues by 2009.

The interest in mobile IM is being driven by perceived benefits such as increasing data ARPU, service differentiation, churn reduction and building customer loyalty. The announcement in February 2006 that a group of 15 mobile operators worldwide – including Tier 1 players such as Vodafone, Orange and T-Mobile - plans to roll out interoperable mobile IM services shows that MIM is seen as a significant potential revenue generator by the operator community.

One challenge for operators in offering comprehensive MIM services is identifying the right business model. Attracted by fee-based services in the mobile space, fixed IM service providers such as Yahoo, Microsoft, AOL, Google and ICQ are eagerly expanding into the mobile domain and trying to gain a dominant position in the MIM market.

The tug of war between operators and the fixed line IM service providers is becoming complex. Would consumers prefer a white label operator offering to more trusted brands such as MSN? Operator-centric MIM services offer a wide range of benefits but may not be the best choice for operators in the long term. Instead, a cooperative model where operators leverage the brand strength of fixed-line IM service providers will enhance the value proposition to end-users, and help operators tap into the existing fixed IM customer base more easily. Interoperability here is key. Mobile Instant Messaging Report 2006-2011

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