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Pictures not sent, MMS revenue not received

Two recent studies reflect that while consumers are snapping up camera phones-and snapping pictures-they are not sending them wirelessly and, therefore, carriers are missing out on a potentially vast revenue source.

This is particularly true of major public events, such as the upcoming World Cup soccer matches in June in Germany, which may become the most-photographed sporting event in history, with an estimated 4.5 million photos expected to be taken, but less than one-quarter expected to be sent via multimedia messaging service.

Due to the vast number of carriers and data plans, no one is attempting to estimate the magnitude of missed revenues across the industry, but studies reflect that only 20 percent of American camera-phone owners (30 percent in Europe) are likely to send pictures via MMS.

The issue of consumer camera-phone use and missed revenue opportunities for carriers is particularly stark in the United States, where camera phones have rapidly reached about half of all mobile-phone users. In this maturing market, carriers are moving to a revenue growth model that depends on data usage. Yet the plethora of data offerings and pricing seems to have left a fog of uncertainty in the consumer’s mind about the cost of sending photos, say, via MMS.

In a study of consumer behavior and camera phones, The NPD Group, a Port Washington, N.Y.-based research firm, found that only 20 percent of users send photos wirelessly (by any method) to family and friends. The other 80 percent leave them in the phone’s memory, perhaps only calling them up to display to someone standing next to them. In the view of NPD’s Neil Strother, research director for mobile devices, carriers should move immediately to inform and educate consumers.

“One of the major barriers faced by carriers is consumer uncertainty over costs,” Strother said. “Six out of 10 subscribers aren’t entirely sure what the price is for sending a picture message, which means they’re less likely to do so. A concerted education and marketing effort by carriers would go a long way toward resolving this problem.

“One exception is Sprint [Nextel Corp.], which has done a pretty good job,” Strother added. “They’ve focused on it.”

Underscoring the potential upside for carriers’ efforts to grow the number of subscribers sending photos wirelessly, The NPD Group study asked those consumers who do not own a camera phone what they’d do with one. A majority said they would like to send photos to friends and family.

“Ultimately, you have to make it easy, affordable and understandable,” Strother concluded. “This is not a criticism of U.S. carriers because, really, we’re still early in the adoption curve.”

According to Sprint Nextel’s Pierre Barbeau, general manager for imaging and the carrier’s Picture Mail offering, “We sell our services as a solution, not a transaction. All our plans are on an unlimited basis and typically bundled with other data services. [MMS is included in this offering.] We’re less concerned with how much wireless use there is, as long as customers find value in the service overall. If you design your solution around the customer’s actual needs, you end up with a much different expression of what your service is.”

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The issue is global, according to SmartTrust, the Stockholm-based mobile device management services company that, not incidentally, offers carriers a range of services that include ways to boost data usage. SmartTrust’s international survey of mobile-phone use reflects that 63 percent of mobile subscribers own a camera phone, but a photo taken by such a device has only a 30-percent chance of being forwarded via MMS. Ninety percent of subscribers are uncertain of MMS pricing while roaming, 64 percent are uncertain that a photo will be received at the other end and 18 percent have experienced a failed MMS delivery due to poor handset configuration.

The firm also found that consumers around the globe suffer from “mobile service fatigue,” as they struggle to keep up with the rapid deployment of new handset features, data services and complex pricing structures.

SmartTrust’s research reflected that less than half of MMS-enabled handsets had ever been used to send an MMS. Of the 4.5 million photos projected to be taken at the World Cup, less than 1 million will be sent via MMS. The device management services firm sees those numbers as a lost opportunity for carriers, particularly those that have subsidized camera phones for their customers and expected to see more revenue from photo sharing.

“There were high expectations for revenue driven by MMS,” said Johan Valentin, SmartTrust’s general manager for the Americas. “Photographs sent from camera phones are just one case. Of course, you can send other multimedia files.” But MMS as a whole is the most under-utilized, potentially revenue-generating service, Valentin said.

Uncertainty over the cost of sending MMS, particularly while roaming, is the main barrier, according to Valentin. “We see it as the operator’s responsibility to change consumer behavior and that’s going to take time and education.”

The second barrier, easier to tackle, is the lack of properly configured phones, according to Valentin. SmartTrust’s studies reflect that nearly one-fifth of failed MMS deliveries are due to poor handset configuration.

“Most carriers are aware of that and are working to take care of it,” he concluded. “That’s an area we’re active in, to help operators get systems in place.”

How big is the device management services space, in which SmartTrust toils?

“It’s a jungle out there,” Valentin said with a laugh.

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