The number of mobile messages sent in 2011 will increase by 12.5 per cent on 2010

The number of mobile text, picture and video messages sent worldwide will surpass 7.5 trillion in 2011, according to research firm Ovum, marking a 12.5 per cent increase on the 6.7 trillion sent last year.

Ovum also forecasts that the SMS-based messaging market will generate revenues of $153bn over the year, eight per cent more than it generated in 2010.

However, according to Ovum analyst Neha Dharia, while the mobile messaging market will continue to grow over the next four years, it is fast approaching an inflection point in the face of competition from IP-based messaging tools.

“Consumers will increasingly choose to send messages via the growing list of internet-based messaging services that have entered the market, rather than the traditional text message,” she said.

“The trend is intensifying due to the growing presence of smartphones, low-cost data plans, and the prevalence of third-party messaging service providers on the mobile phone. To continue to drive revenues from messaging, mobile operators will need to be innovative in their approach to both the services they offer and their business models.”

The research firm stated that device vendors in particular have been successful with messaging services to rival SMS, with RIM’s BlackBerry Messenger, Apple’s iMessage and Nokia’s Ovi Messaging tools that have all proved popular amongst consumers and are capturing a share of mobile operators’ SMS revenues.

Dharia also stated that social messaging is growing in importance, as social networking sites are providing new ways for users to communicate with their mobile phone and transforming the content of the message.

Facebook has championed its messaging service, which allows users to share photographs and other media, while Twitter has triggered discussions over hot topics and current affairs, and claims that 40 per cent of tweets come from mobile devices.

According to the report, mobile operators should expand their messaging portfolio and add their own internet-based messaging option to claw back lost market share, while ensuring that they do not to replicate exactly those already in the market place.

Assuming that Facebook Messenger provides a compelling messaging experience, it has the potential to achieve a greater reach than BBM, WhatsApp, KakaoTalk or the as-yet-unlaunched iMessage. According to Facebook, it has more than 250 million active mobile users, and these users are twice as active as non-mobile users of Facebook. In addition, the company has partnerships with 200 mobile operators in 60 countries.

This larger addressable market is a key differentiator between Facebook and other messaging application providers. Facebook already has a massive installed base of users, on both the mobile and the PC, to which it can promote Messenger, which will be available to subscribers to download for free.

The company says the overall Facebook messaging experience will be faster with the Messenger application, which will definitely be seen as an advantage by Facebook Mobile users who are also heavy users of Facebook Messages. Facebook Messenger will also enable “free” messaging (over IP), group messaging (courtesy of Facebook’s acquisition of Beluga), and integration with the phone’s address book so that Facebook Messenger users can send messages to non-Facebook Messenger users via SMS.

Facebook Messenger’s integration with Facebook Messages and the phone address book, and its inclusion of Beluga’s group messaging capabilities, gives it a potential edge over the other messaging applications, and may be a key factor in inducing either churn among the existing users of these applications, or in encouraging adoption by new users.

One potential drawback of Facebook Messenger is that Facebook Mobile users will have to download and install Messenger as a separate application on their smart-phones. The application may not be appealing enough for existing Facebook Mobile users to do that en masse. Even though Facebook does have the advantage of a significant installed base of mobile users, it will face the same challenges as its competitors with regards to growing the penetration of Facebook Messenger.

With regards to Facebook’s mobile operator partners, these will likely also benefit from the way in which the new Messenger application will work, in that messages will continue to be delivered via e-mail notifications and texts. That means that the mobile operators will still generate data and SMS traffic, and revenues, from their subscribers’ use of the Messenger application. In order to use Facebook Messenger, mobile users will need to have a smart-phone, a mobile data plan and a messaging plan with their operator. Facebook Messenger may well be a factor that encourages mobile subscribers to upgrade their devices and plans.

As to whether Facebook Messenger will have a significant impact on carriers’ SMS traffic and revenues, it’s too soon to tell. While the penetration of smart-phones (which enable applications) is growing quickly, all devices enable SMS, and it is the ubiquity of SMS and its interoperability across networks and devices that will ensure that SMS continues to play a key role as a messaging bearer.

It is also possible that Facebook Messenger may help Facebook to shift the cost of SMS notifications and messages in markets outside of the US at least, back onto the mobile user. Facebook has not revealed the commercial arrangements that exist between it and its 200 or so carrier partners, but Informa believes that the company is probably bearing the cost of SMS notifications, buying SMS at wholesale rates either directly from the carriers or from a messaging transactions network. If Facebook Messenger requires users to pay to send SMS messages to non-Facebook Messenger users, then that is a cost that Facebook no longer has to bear, and it is also retail (rather than wholesale) revenue for the carrier.

It is possible that Facebook Messenger will contribute to the cannibalization of mobile operators’ SMS traffic and revenues, but it may also, perversely, contribute to the growth in mobile operators’ SMS traffic and revenues, because Messenger users will be able to send SMSes to their phonebook contacts from within the application.

Without doubt, Facebook Messenger has immediately become a leading contender in the mobile messaging applications market. Indeed Apple may already be too late, with iMessage. The smaller start-ups will find it difficult to compete without some significant differentiation. BBM will continue to thrive, but remain niche. Carriers are the only other players for whom Facebook Messenger does not necessarily represent a significant threat. Informa believes that this is because Facebook understands that it needs to work with the carriers in order to reach its customers on mobile.

The Vodafone device has deep integration with Facebook

Operator giant Vodafone on Wednesday introduced the world’s first ‘official’ Facebook phone targeted specifically at the prepay market. The device, known as the 555 Blue, will be a group wide offering, aimed at the youth demographic in both mature and emerging markets.

At a London press conference, Telecoms.com got to chat with Vodafone’s group terminals director, Patrick Chomet, who explained that the device which is manufactured by Alcatel (the French vendor’s brand was acquired by Chinese vendor TCT Mobile in 2004) and runs a proprietary OS, took an in house team a year to develop.

In dedicating this level of resource to the programme, the operator clearly expects a strong return on its investment. Chomet pointed to Vodafone’s second quarter results, announced last week, which revealed that data revenue grew by 24.5 per cent year on year to £1.5bn, representing 13.7 per cent of group service revenue. More importantly, this growth brought about an inflection point where income from data services for the first time offset the decline in voice revenues.

In a bid to harness this trend, the Facebook phone will be used to capitalise on the opportunity afforded by data usage in the prepay sector, by deeply integrating the social networking experience with the device.

Upon activation, users are presented with the option to either sign up or sign into a Facebook account, after which the user’s Facebook friends list becomes integrated with the phonebook. Automatic updating is user definable at a granular level allowing users to keep costs down, which for Vodafone delivers an opportunity to cash in on data usage from a relatively untapped sector and for Facebook opens up the opportunity to increase its user base in rural, emerging markets where fixed line internet is nonexistent.

Kumar Ramanathan, chief marketing officer for Vodafone Essar, flew in from India to give his perspective on the device launch in his market, which he believes will be an easy pitch for both urban and rural areas due to Facebook’s popularity in the Indian market. “We have 60 million mobile internet users in the country and around 40 per cent of those use Facebook on mobile. We have a huge number of young people and social networking will drive growth in the mobile space,” said Ramanathan.

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Interaction with a fellow human being can help combat the dreaded customer churn

In the continuing drive towards improving customer service and encouraging self service, telecoms companies are increasingly broadening their online resources with a range of communications channels; from more prominent and detailed FAQs to customer forums where subject experts communicate with each other and exchange tips to help consumers solve problems without recourse to a live agent.

Yet despite these alternative channels, the contact centre with real people on the end of a phone remains one of the key means of providing customer service. But this method is increasingly complemented by these additional channels.

The online channel will naturally appeal to a particular demographic: The ‘techno-savvy’ Facebook generation are more likely to go online to resolve customer service and technical issues. Older consumers tend to prefer the reassurance of human interaction. Age UK highlights that older peoples preferred choice of interaction for information or advice is face to face, followed by over the telephone. They also remind us that over 60 per cent of 70-79 year olds and 75 per cent of those over 80 never use computers.

In fact, all customers are expecting more from their contact centres in terms of speed, variety and depth of help. The Autonomous Customer report published by BT Global Services, showed 43 per cent of customers prefer to deal with an organisation via the internet but still reach for the phone if there is a complex problem or they want some advice. Seventy eight per cent regard themselves as ‘shopper swots’, having used the internet to research by reading reviews, visiting comparison websites and using self serve options before they buy, while 60 per cent said their method of contact will change continually depending where they are and what they are doing. A total of 83 per cent said they will buy from companies that make it easier for them to do business with – which indicates that getting the right communication channels in place can pay enormous dividends. The results of this survey indicated that smart phone users tend to display all of the above behaviours more strongly than other customers.

With the 21st century population constantly on the move, diversity of communications tools (smart phones, tablets, laptops, netbooks, PCs at work and home), flexible working and shift patterns, all demand 24/7  service.  Many Telecoms companies have been wise to this for some time as they are happy to network their contact centres in different countries to take advantage of different time zones in the drive to offer complete 24/7 access to a human agent.

The latest technology can help fine tune the customer experience with speech recognition products providing a branded greeting for each caller, bundling the caller’s intentions together with contextual information about their profile and history to determine the most appropriate next step ― self serve or live agent ― to effectively resolve the interaction. The result aims to be customer self service that is friendly, intuitive, and on the customer’s terms. The use of online chat can help companies improve their online sales by proactively engaging with website visitors.

Social media routes like Facebook and Twitter are increasingly used to connect and have meaningful, open conversations between organisations and customers (some companies have thousands of followers), but a balance must be maintained to ensure that these communications channels are not used too overtly to push sales as there is potential for a backlash if consumers feel that they are being manipulated.

Appreciating that this is a dialogue and not a sales pitch helps smart companies tailor additional messaging and interaction accordingly, enabling customers to have a deeper and hopefully more lasting relationship with the brand. Knowing when to offer help and when to take a step back so the customer can proceed at their own pace is key to using social media in the most personalised and effective way.

Interaction with a fellow human being can help combat the dreaded customer churn estimated at between 30 per cent and 40 per cent in the UK according to research carried out by Pitney Bowes. In fact, one in seven mobile phone customers has been talked out of leaving their existing network when they call up to terminate a contract the Firstsource Solutions YouGov survey revealed. These human interventions can also be used to cross-sell additional or complementary products, providing the timing and mood is right. Who better to judge that moment than an experienced contact centre agent? And who better to act with courtesy, professionalism and charm on a call to make all your customers feel like VIPs?

There is, however, a health warning. Even if you fine tune all your channels to reach your customers at any time on any device, research shows that some customers have no desire to stay loyal to a company.  And the prevalence of the comparison websites encourages consumers to review their services and seek the best deals. Some churn is an inevitable consequence of the natural human desire for novelty and variety.

But if you want to compete, then the most important lesson of this digital age is that people are increasingly short on time and patience. It’s now crucial to ensure that the channel your customer chooses works first time, as a report from the Harvard Business School demonstrated in July 2010. The report said: ‘Research shows that customers who attempt to self serve, fail, and are forced to pick up the phone are 10 per cent more likely to be disloyal than those customers who were able to fully resolve their issues in their channel of choice.’

The traditional contact centre offering can now be augmented and extended by an increasing range of channels offering a much more bespoke level of service which customers increasingly expect as standard. Telecoms companies that embrace this approach will have the most lasting relationships with their customers now and even more so in the future.

Iain Regan is SVP, Head of Telecoms & Media, UK & Australasia, at Firstsource Solutions.

He also comments on the importance of partnerships and the need to make content available everywhere.

He also discusses the commercialisation of the platform and its outreach to developers and users.

Is Twitter struggling to control its ecosystem?

Social networking heavyweight Twitter has confirmed its acquisition of TweetDeck, a dashboard application for monitoring tweets and topics on the site.

The price paid for the application was $40m plus, according to Ovum, and Twitter said it will continue to invest in the tool, which it is pitching as a way for brands, publishers, marketers and others with a platform to track real-time conversations.

According to Ovum analyst Eden Zoller, the deal, announced Thursday, is a defensive move by Twitter and highlights a number of concerns about Twitter’s strategy.

“The acquisition of TweetDeck is part of an ongoing move by Twitter to gain more control over its ecosystem, where growth and innovation are increasingly driven by third parties. At Twitter’s developer conference last year it announced that 75 per cent of Twitter traffic is driven by third party applications and partners, TweetDeck included,” Zoller said.

The concern for Twitter in this scenario is that the applications driving growth are largely outside of its control in terms of direct monetization. According to Zoller, it is also discouraging developers from producing new Twitter clients, ostensibly to ensure a consistent user experience — although the unspoken message is that Twitter does not want developers to compete against it.

Twitter has been hitting the headlines this week for other reasons too. The firm has said that it may be forced to hand over information for thousands of users invovled in the superinjunction scandal, where the Twitter website was used to breach privacy injunctions in place for a number of celebrities including premiership footballer Ryan Giggs.

Movistar customers across Brazil, Argentina, Colombia, Chile, Ecuador, El Salvador, Guatemala, Mexico, Nicaragua, Panama, Peru, Uruguay and Venezuela can now access their social networks, including the likes of Facebook and Twitter, via the mobile portal known as Xumii Social Stream.

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Twitter is now signing up 500,000 new users every day

Jack Dorsey, the co-founder of micro social network Twitter, is returning to the company as product lead and executive chairman. Dorsey quit the CEO position in October 2008 to be replaced by cofounder Evan Williams. Some say Dorsey left because Twitter was struggling to meet demand and others because it wasn’t making money. Either way, Williams was replaced in October 2010 by Dick Costolo, who was charged with making the company generate some cash.

Now Williams will be replaced again, stepping back from Twitter on a day to day basis. Dorsey will fill his shoes as lead product manager but will also work on his venture as CEO of Square, which develops a credit card reader the size of a key fob that plugs into the headphone socket of a smartphone, turning the device into an electronic point of sale.

Earlier this month, Twitter celebrated its fifth birthday, now signing up 500,000 new users every day.

The Facebook for Feature Phones app should work on more than 2,500 handset models from Nokia, Sony Ericsson, LG and other manufacturers

Social networking giant Facebook this week extended its reach to thousands of lower tier handset models with the launch of a Java-based application created by developer Snaptu.

The Facebook for Feature Phones app should work on more than 2,500 handset models from Nokia, Sony Ericsson, LG and other manufacturers, specifically targeting non-smartphone users. As a result, the app features an easier to navigate home screen, contact synchronisation, and fast scrolling of photos and friend updates. Snaptu believes its app will work on 80 per cent of devices worldwide.

Moreover, Facebook  has signed up 14 mobile operators to allow users to use the app for free – without data charges – for the first 90 days. The company expects to get more carriers on board in the near future.

Operators to have signed up to the agreement already are: Dialog (Sri Lanka), Life (Ukraine), Play (Poland), StarHub (Singapore), STC (Saudi Arabia), Three (Hong Kong), Tunisiana (Tunisia), Viva (Dominican Republic), Vodafone (Romania), Mobilicity (Canada), Reliance (India), Telcel (Mexico), TIM (Brazil), and Vivacom (Bulgaria).