Microsoft Expands IM-Over-SMS

Via a text messaging deal with Orange, MSN Messenger could reach 35 million more users in Europe.
Microsoft's MSN unit is expanding the reach of its MSN Messenger instant messaging client, through an expanded deal with European wireless carrier Orange SA.

The agreement will see Paris-based Orange making MSN Messenger available via a Short Messaging Service interface to its 35 million subscribers across the continent. Users in the U.K., the Netherlands, and Denmark currently have access to the service, with France and Belgium to receive the service by the end of the year. Previously, Orange had been using the service on a trial basis in Switzerland.

Orange thus becomes the first operator to offer MSN services across the whole of Europe. MSN mobile data partner MIGway is handling the technology behind the implementation.

It's not a perfect setup, since IM-over-SMS is subject to the same idiosyncrasies as all SMS -- for instance, messages can be inexplicably lost or delayed, without notice. It's also slightly more complicated than usual SMS.

By sending SMS messages to a special number, users can view their MSN buddy lists and respond to and send IMs to .NET Messaging Service users. Group chat also is supported, with each message being delivered via SMS.

To find out who's online, users have to send a contact list command to the MSN Messenger number, and the system responds with a numbered list of online users. Users can then send a message to any of their online contacts by texting MSN Messenger with the number associated with the contact.

However, MSN's service is more intuitive than AOL Instant Messenger's SMS implementation, which requires users to keep track of a whole host of special, four-digit numbers -- to log on, log off, retrieve their Buddy List, set an alert, or block users. To IM a Buddy, users also must send an SMS to another unique number -- indeed, a different four-digit number for each contact. AIM via SMS can only contain 30 users in its Buddy List, so that if an unlisted user sends an IM, they receive a temporary number that a user also must remember. (Being able to enter and look up these unique SMS numbers from a mobile phone address book helps a great deal, although sending a single IM remains a multi-step chore.)

While some implementations thus can feel kludgy, such IM-over-SMS implementations work out very nicely for the carriers. For starters, it doesn't require subscribers to buy new phones.

It also provides a neat model for billing for mobile IM use. That's been something of a concern, since users are accustomed to paying a fee for each SMS that they send. But per-message fees are unknown in the IM realm, and as carriers explore ways to give IM to their subscribers, they're also having to cope with the fact that there isn't yet an established business model for it.

Orange also plans to integrate MSN's free Hotmail e-mail service with SMS. Customers can register to be notified via text message when they receive new e-mail, and can view, forward and respond to messages via SMS commands.

For European wireless carriers like Orange, incentives to increase text messaging use are a benefit as they seek to boost the all-important metric of average revenue per user (ARPU), in a bid to offset the staggering debts incurred with their 3G rollout. By linking SMS to the millions of PC users with IM, such arrangements also serve as a relatively easy and inexpensive way to increase the market for text messaging, which is thought to be near saturation in Europe.

Rolling out MSN Messenger and Hotmail across Europe stands as the most recent effort by Orange to add data services to its product mix. The carrier also offers community applications such as group voice messaging, group text messaging and conference calling.

"We have entered an exciting and critical stage in the new mobile landscape," said Richard Brennan, executive vice president for the carrier's Orange World data services unit. "With the roll-out of new technologies, platforms are being delivered that enable us to offer exciting new services to our customers seamlessly across our footprint. No longer do our customers have to be tied at home to their PC -- they can take their world with them."

For Microsoft, the agreement serves as the latest stage in efforts to expand the reach of its .NET Messaging Service and other mobile services, like its mobile portal. The enlarged deal with Orange broadens MSN's wireless user base to 110 million users in 15 countries across Europe, Africa and the Middle East.

"The opportunity to deliver MSN services to an additional 35 million customers in Europe is a significant step for us," said Vassili le Moigne, mobile business manager for MSN Europe. "This ... fits perfectly with our strategy of developing MSN's Internet software subscriptions business and generating incremental ARPU for partners, [while] delivering best-of-breed services to mobile users across Europe."

The Redmond, Wash. software giant began striking alliances with European wireless carriers last year. By the end of the year, it had agreements with more than 20 operators in 13 countries, covering a total of 56 million customers. It's also seeking to work with carriers on other initiatives -- for instance, Orange is the first carrier to market phones based on Microsoft's Smartphone operating system.

Christopher Saunders is managing editor of InstantMessagingPlanet.com.






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