European SMS Market Offers Increased Opportunities

10% of Europe's SMS traffic now comes from value-added services and content such as ringtones, quizzes and mobile chat, says international wireless messaging operator Netsize. The research, taken from Netsize's recently published European SMS Guide and presented at last week's SMS 2003 conference, also shows an increase in the use of premium rate SMS as a billing mechanism for such content. With mobile ownership now over 75% across Europe, the findings suggest that despite voice revenues levelling off, the market for mobile content remains strong.

"Premium rate SMS has become the preferred billing mechanism for mobile content and services, including SMS, MMS and Java," explains Craig Barrack, UK country manager for Netsize. "Two years ago, premium SMS was only available across a handful of operators. Now, it is available via 60 European operators. The market for ringtones alone is worth over euro 1.2 billion per year. With the introduction of higher-value content such as Java games, the opportunities for content providers to open up new revenue streams across the continent are growing daily."

However, Netsize's SMS Guide also reveals enormous variations between premium SMS tariffs, technical specifications and the terms and conditions offered by different European operators.

"The opportunities are there, the infrastructure is in place and mobile users have proved that they are willing to pay for content," adds Barrack. "However, for a single content provider looking to leverage the European market as a whole it is important to understand the unique regulations and practices of each country. In Finland, for example, the highest premium SMS tariff is a generous euro 20 whilst in Spain it is just euro 0.90. Services must therefore be tailored not just according to local language but to suit a complete spectrum of tariffs."

Differences across Europe have been further compounded by the current EU e-money directive, originally designed to regulate the use of electronic money and now covering the delivery of premium content and services delivered over mobile networks. With each EU member state currently in consultation over the directive, Netsize warns that pan-European SMS campaigns could be subject to further regulation.

"Despite this diversity, Netsize eases the complexity of such campaigns by offering content and service providers a single point of access to over 60 mobile operators in Europe, enabling them to reach more than 280 million mobile users. We can act as a direct technical and commercial partner for all of Europe. With 11 regional offices across Europe we are also better prepared to tailor services to suit local regulations and languages. The opportunities have never been so great for content providers," finishes Barrack.