I'm ready to provide an update on the Australian Premium SMS Market (PSMS). A briefing from Hutchison 3G last week, regular informal discussions with Vodafone, a briefing from Telstra yesterday 5th. December 2007 and lunch with Optus the same day, I now have a good feel for how things look at year end and a general view going forward for at least 2008.
So here goes:
Premium SMS Growth Rate All parties agree that there is now only slow growth in PSMS. It is positive but nothing like the 2006/07 growth rate of around 45%. The anticipation is that over the next year it will grow at 15%. This position is reflected in Dialogue's (www.dialogue.net) existing customers, but Dialogue is also winning new business due to better account management and higher quality of service. Interestingly this is true even when Dialogue's rates are not the best, our billing and settlement is more efficient.
WAP Billing Whilst everyone is still waiting for official results on the payforIT situation in the UK, it seems that the Australian networks have bought into the idea of billing from a WAP session, direct to mobile bill. Optus now have this solution completely in place, including MSISDN pass-through. I would expect to see this available on all networks with the possible exception of Virgin Mobile by this time next year. So its time to get your mobile SEO into place and pre-book your Google Adwords. Fortunately Dialogue has a superb 360 degree mobile internet offering which includes an excellent drag-n-drop Mobile Site Builder (MSB). It is fully payforIT compliant and will easily integrate into the the Australian WAP billing systems.
Premium SMS Complaints These are still on the rise and Telstra will, in the new year (2008) provide a score card to each SMS aggregator which rates their number of complaints as a ratio of the number of premium messages sent/received. My feeling is that this should be related to value of PSMS business, so we'll see if that idea can be sold into the very reasonable guys at Telstra. Optus have been providing this score card approach for 6 months or so, and it provides a good way of putting your own efforts into context. We believe that Dialogue has a good system, but we need to continually strive to improve things.
Offshore Bulk SMS Many aggregators are soucing bulk SMS from cheap off-shore providers, this enables them to offer cheaper SMS to their content providers, which helps them in turn to market and grow. Telstra has now given notice that they will be monitoring these overseas routes and apply interconnect charges, or shutdown international routes if they are abusing normal traffic exchange arrangements. I'm guessing that this will squeeze content partner revenues and may lead to even slower growth in PSMS. I think that 10c per message in Australia is a little high and 7c is a bit more in line with european pricing.
Restricted Access Services This is still stalled. There are probably only a few thousand consumers registered and purchasing 18+ content. I suspect that things may improve by the end of 2008.
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