Excessive charges hinder SMS services

Reliability and spamming concerns also hold back commercial SMS use

Adoption of premium-rate short message service (SMS) for commercial purposes is stalling because of technology limitations and concerns about spamming, research has warned.

The majority of publishing, broadcast and multimedia companies in the UK using SMS are disappointed with the revenue share they receive from their telco suppliers, with many believing they are being charged excessively.

A qualitative survey of 36 media companies conducted by Benchmarking research found that 83 per cent of respondents now use SMS as a key component of brand awareness and marketing campaigns, driven by the medium's immediacy, interactivity and cost-effectiveness.

But while generating extra revenue is perceived as a major objective of SMS, more than half - 55 per cent - said their SMS services did not contribute significantly to the bottom line.

The research was commissioned by Opera Telecom whose managing director, Gary Corbett, said reliability issues and concerns about SMS as a technology were holding back uptake.

Spamming had already succeeded in sullying the use of SMS for commercial use, the research found.

"The networks are not built for the sort of traffic coming through. And those doing it are disappointed with the revenue share - the media are gaining typically 40 to 50 per cent of what the consumer pays," Corbett said.

But such concerns have done little to hamper enthusiasm among mobile operators themselves. O2, for example, has pinned an annual £200m value on the premium SMS market.

Nog Sawdon, head of interactive services at GMTV, told vnunet.com that the television company's strategy was to move increasingly towards SMS as a replacement for paper-based services.

"Last July we started with a text-your-answer competition and 140,000 people entered. It was an indication that texting was something we should look at," Sawdon said.

A new all-time high of 1.41 billion chargeable person-to-person text messages were sent across the four UK GSM network operators during August, according to figures from The Mobile Data Association.

GMTV now also uses SMS for programme support. Subscribers pay about £4 for 40 text messages offering advice on subjects covered in the studio. In January 33,000 people subscribed to an inch loss SMS programme - over 50 per cent more subscribers than any other paper-based campaign the company had run.

"We wouldn't do it if it wasn't a revenue generator," Sawdon said. "But you have to be aware of the psychological impact of texting. There is an expectation that this will affect viewer figures. It's good brand enhancement and I have more belief in this than interactive TV."

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