Messaging Blues

The Magic of Messaging: This blog contains stuff related to E-Mail, SMS,Text Messaging, Instant messaging, MMS etc (Mobile/Internet/Wireless/Text/IM)

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Wednesday, March 01, 2006

SMS is a temporary drag on 3G usage - Philippines

The take-up of third-generation (3G) mobile phone services in the Philippines will likely fall short of initial expectations.
"The potential market for 3G services is currently very small, and it will require some years for demand on content services to grow substantially to merit offering 3G," information technology (IT) research and consulting firm XMG, Inc. said.

In essence, 3G is designed to allow mobile phones to handle larger amounts of data. The speed of the service is being likened to an internet broad-band connection, this time using mobile phones and personal digital assistants, not laptops or desktop computers.

This early, 3G players are thinking of leveraging on "large and rich" content such cuts from movies, television and Japanese anime shows; news updates for business users; music tracks for audiophiles; sports clips for athletes and sports enthusiasts; and interactive games.

But for 3G to gain market success, XMG said consumption of data services per individual subscriber has to be substantial enough to automatically consume 3G capacity the moment it is offered.

"This might not happen in the Philippine market, however, as the low- bandwidth SMS service [or texting] remains the dominant source of revenue for local service providers," XMG said.

For instance, Smart's 2004 annual report showed the company derived at least 88% of its data revenue from SMS. "This suggests that a majority of subscribers still find SMS to be sufficient for their needs and would not immediately adopt 3G technology," XMG said.

Still, XMG said local prospects for 3G are bright, albeit not immediate. "Although SMS remains the dominant form of data service consumed by mobile subscribers in the Philippines, the growth in consumption of value- added data services is slowly outpacing the consumption of SMS services. This would indicate the potential market demand for 3G services in the future."