Wireless messaging applications in the United States typically involve voting for reality TV show contestants, participating in trivia contests or requesting some sort of information, and most cost a few dollars or less. But one company is hoping to expand the functions of text messaging as well as increase the dollar amounts.
“We’re looking at being able to offer m-commerce applications using premium text messaging,” said Cedric Fernandes, chief information officer for Netpace Inc.
Text messaging in the United States got its first kick two years ago when the nation’s operators opened their networks to messages from rival carriers. Person-to-person wireless messaging currently generates more revenue than any other wireless data service. Such success has led to interest in text-messaging applications, interest that has been spurred by the recent introduction of premium billing functions and common short codes. Thus, carriers can offer applications based on simple five-digit numbers and can charge beyond the standard 10-cent transmission fee.
Netpace has been at the center of the market’s evolution, although it has maintained a low profile to date. The company in 2001 launched its text-messaging platform and in 2002 managed a text-messaging contest for Verizon Wireless. The company since has managed several Verizon messaging applications, including its NBA and “Lord of the Rings” polling offerings. Today Netpace brushed off its low profile and announced its new premium messaging platform, as well as its new premier partner status with Verizon Wireless.
“The U.S. is really going to make use of text messaging,” said Drake White, Netpace’s vice president of marketing. “We can accommodate this process.”
However, Netpace is entering a crowded market that has already been the scene of fierce competition. Messaging companies including Mobliss, M-Qube, InphoMatch Inc., mBlox, Telenor Mobile, Ztango and a variety of others are looking to offer premium messaging services to wireless carriers and media companies. The difference is that Netpace has set its sights high-the company is hoping to sell big-ticket items like TVs, books, concert tickets and other goods by using the premium messaging channel.
“We think this is ready to go in the U.S.,” Netpace’s Fernandes said.
Netpace is looking to entice consumer goods companies to sell their wares through the wireless medium. For example, a concert promoter could advertise an upcoming concert on the radio, and could entice fans to purchase tickets immediately through a five-digit text-messaging short code. After sending a message to the short code and then confirming the purchase, the cost of the tickets would show up on users’ monthly wireless bills. The setup also could work through advertisements on TV, in newspapers and in other mediums, encouraging mobile-phone users to make immediate, impulse purchases through premium text messages. Fernandes said the setup would be even faster and easier than calling a 1-800 number or visiting an Internet site.
“The process takes about 15 seconds,” he said.
Although the company is in the very early stages of its offering, Fernandes said initial reactions from carriers and media companies have been positive. Netpace is negotiating with media companies, carriers and consumer goods companies to set up its premium messaging service. Such an offering would be notable because it would add expensive purchases to carriers’ billing statements-something long discussed in the wireless industry although with much trepidation.
“That’s where the carriers I believe are open to negotiations,” Fernandes said. “I think they’re open to exploring the possibilities.”
Founded in 1997, Netpace counts 38 employees and $5 million in annual revenues. The company has direct messaging connections into Verizon Wireless and Alltel Corp., which it plans to resell to other messaging companies. However, Netpace has to purchase connections into other carriers like AT&T Wireless Services Inc. and Sprint PCS through messaging companies like Mobliss that are reselling those connections. Fernandes said it has premium billing connections directly into Verizon Wireless, and will use billing company Qpass Inc. to connect to the billing mechanisms of other carriers.
