UK Wireless Operators Still Dispute Terms on Sending Photos

British holidaymakers taking their snazzy new camera phones to France or South Africa, or even just staying home with them this Christmas, could be in for an unpleasant surprise: chances are they will not be able to send photos unless the recipient uses the same mobile phone operator as they do.

The major operators in the UK -- Orange, Vodafone, O2 and T-Mobile -- have not yet agreed to terms for sending photo messages between their networks.

Though many agreements to "roam" beyond national borders are in place, the shortcomings within Britain and within other countries will undermine efforts to send or receive photos using their camera-equipped mobile phones, both within and outside their home country.

In other words, the consumer satisfaction outlook for the picture phones that mobile operators are force-feeding the public is, well, not a pretty picture.

If your 15-year-old daughter is an Orange user smiling in front of her new UKpound 200 phone the way all those intoxicating commercials encourage her to, she will be frowning once she realises boyfriend Mike in Manchester is on O2.

Ditto if she's sending a snapshot to granny in Devon -- and granny is on Vodafone (and defies her age group by owning a camera phone).

The knock-on effect for Christmas holiday revellers abroad is that they will have limited ability to send photos home.

Although the UK operators have roaming agreements with many operators on the continent, photos will only arrive home if the recipient is on the same home network. The Orange user visiting Madrid can tap Telefonica Moviles; but is again out of luck trying to send to Manchester Mike on O2.

Even then, cross-border roaming can be hit-and-miss, though it is getting stronger. "We have roaming in Europe with some operators but not all," says Pilar de la Torre, director of business development for Telefonica Moviles in Madrid.

No one among the operators is saying exactly when they will iron out this embarrassing wrinkle. The most optimistic assessment comes from O2, where UK product manager James Parton is hopeful of agreeing with one UK operator by Christmas. That's no guarantee and it would still leave two other operators out of the O2 fold.

"The networks are working together to ensure the service is interoperable by early next year," an Orange spokesman said.

A T-Mobile spokeswoman had a similar take, noting "it's not ideal at the moment" and that "we are all working towards interoperability". Although she anticipated "imminent" improvements, she could not confirm that agreements would be in place before the new year.

Telefonica's de la Torre sang from the same hymn sheet. "We think that next year we will fix these problems."

The "problems" are not technical as all the gear is in place to allow a digital photo to travel across different brands of mobile networks. The hold-up is business related: operators have not agreed on how to share revenue and charge each other and their customers for relaying photo messages, which are priced in some cases as high as 40 pence per message.

"If you're an operator, you don't want to give away 1 pence, 2 pence, or 5 pence, because that's going to be enormous five years from now," said Bob Schukai, a mobile phone product director for handset maker Motorola's Europe, Middle East and Africa division. "Nobody wants to make a mistake in terms of how much they give away."

The T-Mobile spokeswoman explained that the difficulties centre around the different pricing schemes in place among the operators. Some operators, such as Vodafone, are offering a promotional package of free picture messages, while others, like T-Mobile, are charging a full fare of 35 pence per message.

"If one operator is charging customers and another is offering service free of charge, how do you work out the billing?" she asked. Clearly, neither T-Mobile nor its UK rivals has worked out an answer. Once they reach their business agreements, they will still have to test their cross-operator service before taking it live.

On the bright side, the T-Mobile spokeswoman noted that within Germany, T-Mobile's German users can send to Vodafone's German customers, following a billing agreement reached by the two last month. This is one of the few intra-country agreements in place in Europe, and provides some hope that UK operators can work things out.

As a clunky back-up, the T-Mobile spokeswoman noted that photos bound for another network will arrive as a text message encouraging the recipient to find a computer, log on to a website and use a password embedded in the text message to view the incoming photograph.

She said photo-messaging is still in its infancy and noted that cross-network support did not exist in the early days of the now popular text messaging.

At a typical charge of 35 pence-40 pence, operators are counting on picture messages to contribute handsomely to their near-term revenue. The fourfold increase over 10 pence simple text message fees would give a nice jolt to the all-important Arpu (average revenue per user) that they are desperate to increase.

Operators hope picture message revenue helps make up for the beating they are suffering now that most of them have delayed plans to offer more advanced "3G" services until late 2003 or 2004. They have spent billions on 3G licences and are looking at spending billions more to build a 3G infrastructure.

Picture messaging, or MMS (multimedia messaging) in industry jargon, rides on new "2.5G" networks. These networks use existing masts and infrastructure. They have required no new licences and comparatively little capital expenditure, although operators have spent hugely advertising the picture services in the run up to Christmas.

Operators in the UK have chosen to emphasise the photo feature, even though the combination of rich colour screens and the improved speeds of the new 2.5G networks enable users to swiftly download information like football scores, news headlines, stock prices and weather using "WAP" screens.

But users still recall how poorly these "WAP" services functioned on the slower 2G network when WAP surfaced two years ago. So operators, at least for now, are holding off on the WAP message and focusing on picture messaging. That should change whenever they finally roll out their even faster 3G services.

Given all their 3G woes, the last thing the industry needs is another setback. But the failure of picture roaming threatens operators and handset makers with a nasty public relations black eye, given all of their heavy marketing of their phones' photo-sending capabilities.

A backlash of angry customers "is the worst thing that could happen to the industry right now", warns Schukai. His warning carries a faint whiff of red herring: after all, Motorola has been late to the market with camera phones, so a little fear, uncertainty and doubt might help them catch up to rivals like Nokia, Sony Ericsson and Sharp in that department.

Nevertheless, Schukai predicts a "January syndrome" of Christmas returns for camera phones, and says operators should have waited before they heavily promoted multimedia messaging.

Operators and handset makers also hope the new camera phones-mobile phones with digital cameras embedded in them- stimulate handset sales which have slowed as many European countries like the UK have neared their saturation point. Many industry analysts see the new camera phones as at best an interim fad that will temporarily invigorate sales.

Tim Mui, a London-based analyst with International Data Corporation (IDC), says that all the fancy new models now hitting the market will merely keep handset makers running in place. "The vendors have to come out with the new devices just for the market to remain flat," he says.

IDC predicts handset shipments in western Europe this year will be 100 million, nudging up to 105 million next year. Only two years ago, the industry shipped 140 million in western Europe. IDC does not foresee a return to that level any time soon.