Wireless Power

While Wireless Application Protocol (WAP) has been edging closer to death over the past couple of months, Short Messaging Service (SMS) has been thriving, establishing an increasingly solid position in the European market. I find it very ironic that SMS — an inexpensive and simple communications system that allows users to generate content — should have overtaken WAP, launched by well-capitalized mobile and telco players that touted it as the most powerful wireless communications tool.

Unfortunately, this SMS phenomenon is not global. It’s mainly occurring in Europe, Australia, and parts of Asia where the technology infrastructure supports it. The U.S., on the other hand, is home to a variety of cell phone operators whose technology systems don’t “talk” to one another.

However, if current trends are any indication, the dominance of SMS will soon become a global reality. The three reasons for this are:

  • SMS is simple. WAP can’t claim that.
  • SMS is cheap. Its low usage price is the main reason SMS has been adopted in many countries.
  • SMS is almost global.

In Sweden alone, more than 500 million SMS messages were sent last year — and remember, the country has a population of fewer than 9 million people. In other words, every Swede sends more than 50 SMS messages a year, on average. In reality, the most active users (aged from 10 to 50 years) send, on average, 24 messages a day. And Sweden is not alone in high SMS user rates. Similar figures apply to all the other Scandinavian countries, as well as to the U.K., Italy, Germany, Spain, Holland, Belgium, Australia, and the Philippines.

The users love SMS. The prediction is that user rates will at least double this year; in some countries, rates are predicted to increase ten-fold.

Yet with all this usage, only a few companies have managed to build solid revenue or e-commerce models on the SMS communications format. Yes, you do see screen savers, ring tones, and tickets offered for purchase via SMS, but that’s about all. Very few branding attempts have been made using SMS. Still, the few brands that have experimented with the medium continue to use it, increasing the amount of money they’re dedicating to SMS campaigns. Over the past two years, Coca-Cola has included SMS in most of its communications throughout Scandinavia. These days, Coke is combining individual passwords (printed inside bottle caps) with SMS. This enables Coke drinkers to instantly determine if they’ve won prizes in promotions.

In the U.K., the Virgin-owned nightclub, Heaven, uses mTicket, a U.K.-based wireless ticketing system, as its key tool for selling and distributing tickets to guests. The system allows guests with mobile tickets to jump the queue. All a guest has to do is show the bouncer her mobile phone screen, which displays a password.

But brands are showing a lack of creativity in their exploitation of the SMS channel. So far, interesting revenue models for the service are scarce, and wireless advertising campaigns are so few that you can almost count them on one hand. All this despite the fact that wireless may be the fastest-growing medium in much of the Western world.

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