Sybase Blogs – William Dudley

Worldwide, texting is a very personal activity – not withstanding the texting to short codes and receiving responses or alerts, roughly 90% of texting worldwide is to another person.  Globally, we still see SMS (or texting) growing.  Our global statistics continue to show worldwide SMS traffic growing, but certainly slowing.

We have a number of ways to determine the top “texting days of the year.”  For our role in the ecosystem in the last year, we have visibility to over half of the US SMS traffic and a very significant portion of the global country-to-country SMS traffic.  Consequently, we have to consider both the high volume US traffic in addition to the global country to country (including the US) traffic.   What’s considered high messaging days in the Middle East may not make a dent in the normal rates in the U.S. and vice-versa.  Messaging rates on major holidays or texting days also vary through the day – for example for New Year’s Eve, early in the day, we would see messaging rates at “normal” levels, but later in the evening, we’ll see the rates skyrocket to over 100% of normal.   Consequently, the overall traffic rise for the entire day would be significantly less than the peak hours.   For this reason, these statistics will look at the top 12 international days, which may be different from the more ‘domestic’ (or North American) view.  Finally, we’ll take a look at some of the peak hours in our US centric view of the SMS world.

For these statistics, we’ll consider the period from December 1, 2010 through December 1, 2011.

Typically reference days are a day or two days before a particular holiday; occasionally, it is the day after.  The criterion is simply the closest “normal” day to the highlighted day.  The percentage increase is calculated from that day or day/hour.

Internationally, in country-to-country scenarios, the Top 12 Texting Days were:

I’m not sure why 05/29/2011 made the list.  It was the Sunday before the US Memorial Day holiday. The major event that day was the running of the Indianapolis 500 auto race.

Now, if we simply take the top messaging days on our US-domestic centric node, by absolute volumes, our top 12 list, looks a bit different:

1. 12.25.2010 – Christmas Day
2. 11/24/2011 – Thanksgiving Day USA
3. 01/01/2011 – New Years Day
4. 12/31/2010 – New Years Eve
5. 5/8/2011 – Mothers Day
6. Friday – 6/24/2011
7. 12/30/2010 – Day Before New Years Eve
8. Friday – 6/17/2011
9. Thursday – 6/23/2011
10. Friday – 6/10/2011
11. Friday – 7/8/2011
12. 12/29/2010 – Two Days Before New Years Eve

In this list, we show four separate Fridays in the summer that were in our top 12 (by volume) texting days.  Summer Fridays, no doubt!  Before you ask how many messages we processed, those numbers are confidential, but suffice it to say, it’s well over 1.6 billion messages per day for all of these and more.

Now, if we change this up and compare certain days to “normal” days, we have the following:

I stopped here at the top 9, as comparing these days to “normal” days gets to be a difficult task as we then have to ask “what is normal?”  Those Fridays in June could be construed as being “normal,” yet they are a top 12 in terms of absolute volumes.  Summer is becoming a significant time for people to text; consequently, we are seeing some of our biggest days by volume in the summer.

Many events such as the Japanese earthquake and tsunami, the US East Coast earthquake, the killing of Osama bin Laden did generate record messaging for certain locales or very short periods of time.  For example, in Africa, in the hour after the news about bin Laden was announced, messaging was up over 200% in the 1^st hour and 86% in the 2^nd hour after the news broke.  In the US, the SMS increased almost 20% of “normal” in the minutes that followed the breaking news.

The Women’s World Cup win by Japan created similar deviations from “normal” but not enough or for a long enough period of time to create a “record day.”   These days, significant news is more often “broken” over Twitter vs. SMS.  SMS (person to person) is still used, but as Twitter is a one-to-many micro-blog, it is better for disseminating news bulletins.

Speaking of Twitter, if we compare the top messaging days to the top Twitter days, most of the breaking news that generated the top Twitter days did not result in high SMS volumes, globally – sometimes certain region generated significant texts, as described above, but these did not translate to significant global volume uptakes.

Finally, I wasn’t going to include Christmas Day 2011 in these stats, but early numbers suggest that Christmas this year moves into 1^st place for both absolute volumes and change from the “reference day” (I used 12/26/2011 – the day after Christmas).  The change from “normal” is 24.4%.  This clearly shows that SMS is alive and well and is widely used around the world as well as widely used in the United States for extending Christmas greetings.

I hope everyone had a peaceful and merry Christmas and holiday season.

Mobile messaging, especially SMS-based messaging, has seen a resurgence of usage in the US market; however, it is not necessarily carrier-based SMS that has grown.  There are a growing number of messaging apps and services that have been launched and announced, and services such as iMessage are just around the corner.   This runs somewhat counter to recent industry and general press, were we’ve seen articles stating that “SMS is dead (or dying)” and that non-SMS “chat” services are displacing true, mobile-SMS interoperable services.    Certainly, in some markets, non-SMS “chat” services have cannibalized some SMS revenues – especially outside of the USA and Canada, but in general mobile operator SMS (as we know it) is alive and well.   I’ve made the case, that by enabling and including 3^rd-party, SMS-interoperable services (such as various NUVOs) in a GSM-only country, the MNOs can push back against the non-SMS chat services, as subscribers will utilize the NUVO-style services on non-mobile telephone devices. 

Recently, AT&T Foundry – described as “innovation centers that are home to our collaboration with tech leaders and start-ups to fast-track new apps, platforms, and more,” launched a solution called AT&T Messages. 

This new service, currently in Beta testing on Android platforms, enables users to make all of their messages (both SMS and MMS), voicemails and call logs accessible from multiple devices, such as PCs and tablets. At this point, I am not clear whether or not this requires that your AT&T text/multimedia messages require a different app vs. the native built-in app. And if you have an iOS device, then how does that play with iMessage, which should also use the built-in messaging app (which reverts to standard SMS when the destination is not another recognized iOS device)?   Are iOS-only communications, which are designated differently than SMS-based messages in the application, also available via the cloud to other devices?   While this sounds good, I think there are a lot of compatibility questions that are not addressed.  It should be noted that AT&T Messages is not a new messaging community or ecosystem – but one that extends their existing messaging into the cloud and thus additional devices.

As of this writing, iOS 5 has not launched yet, which includes iMessage.   Since the iMessage announcement, Facebook Messenger also launched, which does indeed interact, leveraging SMS short codes, with non-Facebook Messenger users via standard SMS; however, a non-Facebook user cannot independently address a Facebook Messenger users via SMS.

Another, non-SMS-interoperable messaging service from Samsung called ChatON was announced on August 29^th of this year.  Like many “messaging apps,” this does not interoperate with the SMS ecosystem; however, this is targeted for multiple device families: Android, iOS, Samsung Bada, and Blackberry.  ChatON will also include image and video sharing as well as group messaging. I do not think this is live video calls such as what you can get with iOS Facetime, Fring, or Skype.  It is more MMS-like (but not compatible with the true-global MMS ecosystem).  While packed full of nice features, I have to note that as it is not interoperable with the legacy (and largest) SMS ecosystem, and everyone else that you “ChatON” with must also be using the same application.

With the addition of Facebook Messenger and ChatON, we now have two, rather large install bases of users that will use a non-SMS-interoperable messaging application.  It remains to be seen if these will cannibalize traditional SMS traffic and revenues from the Mobile Network Operators (MNOs).  Certainly, in some countries, apps such as ‘WhatsApp’ have already done so.  In the United States and Canada, however, the app-based NUVOs have dominated the non-MNO “free messaging app” market.  While users are typically assigned an alternative telephone numbers, the usage of these, along with their traffic continues to grow.  If one includes Google Voice, Pinger’s TextFree, various Gogii TextPlus apps, the TextFree app, the Mediafriends HeyWire app, Toktumi’s Line2 app, the GroupMe app and Enflick’s TextNow app, I estimate that the overall subscriber count is in the 15-20 million range – maybe more.  I have also seen statistics that there are actually more of these apps loaded onto non-mobile-telephone devices such as iPod Touches and various tablets than onto mobile phones.  Consequently, they were the first and still lead in terms of bringing traditional mobile messaging to non-mobile telephone devices.   That interoperability has helped improve overall mobile messaging traffic grow in the North American market. 

While it is too early to tell, the recent non-SMS interoperable ‘chat’ launches have only further fragmented the app-based chat options.  While there is nothing that says these companies can’t launch their services, those that continue to assume that their brand will dominate the non-SMS “chat” space are somewhat deluded.  History is a good teacher and the most successful non-verbal communication medium in the history of mankind is SMS.  Why?  Because it literally reaches over 5 billion people and is now a very strong channel for short code based consumer outreach and in some markets mobile payments. SMS is ubiquitous.  That won’t change in the foreseeable future.

MNO based “traditional” SMS Is certainly under siege; however, various press articles’ notion that SMS is dead or dying is quite premature.  NUVOs are playing a great role in the overall ecosystem by offering alternative messaging applications and this should continue if the NUVO companies can continue to grow users and revenue, as well as offer innovative services that users will embrace.  AT&T made a good start by incorporating the cloud-based AT&T Message capabilities.  NUVOs have already been doing this for some time and it is probably a matter of time before we see more MNO/NUVO partnerships such as the Sprint/Google Voice partnership.

As you can see, the “messaging space”  is getting crowded and at some point, there will be a consolidation of sorts.  I will say that messaging and social networks go hand in hand, and someone will eventually offer a true NUVO-style messaging component of a social network that will indeed be a killer app.

Sybase 365 recently released the results of our Global Operator Survey, covering the IP Exchange (IPX) technology.  Three hundred fifty-three operators were surveyed online, with an additional eleven one-on-one interviews.    This resulted in a very interesting cache of data from a variety of operators and service providers, worldwide.  I intend to publish a number of blog entries, based on the results of our survey.  This one is the first.

You can pick up your PDF copy here.

Let’s take this opportunity to now focus on a few areas that are of interest.  Many people have asked me over the last couple of years: “Bill, what is your vision for IPX?”  My answer has been relatively the same.  I envision IPX as the central, global backbone connecting MNOs and other accepted service providers, cloud services, and enterprise and providing intelligent hubs for a variety of interworking and interoperability functions.  What this means is that the IPX is and is becoming an absolute core function for many participants.  Our survey results do certainly lend support to what the IPX has become and what our vision is. 

As far as I know, this is the first time that MNOs around the world have been requested to participate in an in-depth survey of their IPX awareness and potential.   I am certainly encouraged by these results.  For example, just over half (51%) of the respondents define the IPX as ALL of the key definitions of an IPX including “An easy way to deploy end to end IP on common standards,” “a cost-reduction measure,” “a means of ensuring service quality,” and “a route to 4G.”   This shows that our (and others) education of the marketplace pushing the benefits of the IPX have paid off.

In terms of vision, the survey clearly shows that inter-working between Long Term Evolution (LTE) networks will be a significant driver of IPX leverage by mobile operators.  A key element cited will be LTE Roaming agreements.  Today, there are only a handful of operators with LTE networks, but over 63% of the respondents noted that IPX becomes essential in just 1-3 years.    When asked about the benefits that the IPX offer for various next generation services such as LTE Roaming, an overwhelming majority cited various positive benefits with the largest number citing cost reductions as a key benefit.

One respondent noted that “LTE roaming is imperative to overall LTE success.”  Many noted that the managed QoS of an IPX for LTE roaming were key benefits.   One major carrier stated that LTE Roaming “creates a cloud of on-net data roaming MNOs, thereby making it run on a managed pipe, rather than on an unmanaged GRX tunnel.”    Another respondent got into details and stated that LTE roaming will further accelerate once Diameter inter-working is proven.   They also noted that the integration of a clearly defined Diameter roaming solution that supports inter-working with the existing 3G environment as a perquisite for larger uptake.   A few others also noted that the support of Diameter on the IPX would be key elements.

We also asked if there were IPX benefits for IP-based signaling.  Again, well over half of the respondents noted a variety of positive benefits for IP Signaling, enabled by the IPX for next-generation services.  “A single IP connection, underpinned by policy control between network operators” was how one respondent deftly summed up the benefit.   Another indicated that “aggregated signaling, reducing network load and higher network resiliency and redundancy” is a primary IP signaling benefit.  Still several others cited more reliable and secure connections along with bandwidth savings.  One should note that “signaling” today is already supported on the IPX, based on transporting GSM MAP (the SS7 application layer) over IP (AKA SIGTRAN).    Next generation services will use a protocol called Diameter (defined by RFC 3588).  Diameter has been designated as the chosen signaling protocol by 3GPP to support so-called 4G (or LTE) services (outlined in RFC 5516, for those, so technically inclined).   Diameter was chosen based on the fact that is capable of managing a continuous flow of data between a complex mesh of network elements.  

Diameter servers/policy exchange controllers will be attached to IPX networks to provide a signaling and authentication location for multiple mobile operators to connect to in order to validate subscribers’ capabilities in roaming scenarios as well as many other scenarios.  As within next generation networks, Diameter will also be used to set up and negotiate a variety parameters and authentication for most operator to operator engagements – whether that is voice, video or some other communications. 

We had also asked the respondents a more open-ended question around what did they expect from an IPX.  In fact, the question was really not targeted towards next-generation services, but what did they expect from an IPX, today?  Here, we can definitely say that the response was both a mix of services available today (such as SIGTRAN ), voice services, as well as content delivery, but quite a few people really gravitated towards services that are not yet widely available.   Quite a few noted  an IPX should provide access to multiple types cloud services and even mobile payment services.   Cloud services available today including Blackberry® cloud connectivity were mentioned by several respondents.   A significant percentage also mentioned RCS/RCSE, multimedia, and video as well has HD Voice services. 

These very varied responses indicate it is clear that the IPX really is viewed by the global operator community as a central, global backbone connecting MNOs and other accepted service providers, cloud services, and enterprise and providing intelligent hubs for a variety of interworking and interoperability functions.  So our vision is not off-base at all. 

When we first conducted this survey, we knew that the global operator community viewed the concept of an IPX with mixed notions – of what it really is, its benefits, and its drawbacks.  Consequently, it is very satisfying to read these results and know that the vast majority of the global telecom community believes what we believe.  Our own experiences in some specific markets with certain operators certainly had given us some insight, but to more fully query over three hundred operators  — many of them still years away from leveraging  an IPX – has really helped us to tailor our IPX solutions to match what the requirements are now and what they will become in the future.

In future entries, I’ll take a look at some other elements of our survey and what they mean to industry.

Not by a long shot.   But, to read the various headlines such as from BBC, or FierceContent, (and quite a few more — not all of them, mind you, but quite a few) you might get the idea that here is something that will be the true “SMS killer.”  Notwithstanding the over-imaginative headlines, I think Facebook Messenger is nothing more than an expansion of the popular online-based Facebook “chat” service.  I would suspect that this is more of a threat to various Instant Messaging (IM) services than it is to SMS.   The problem with IM is that the various communities have never really been interoperable with one another (which makes for good business for products such as Trillian by Cerulean Studios – users may sign into multiple IM communities using a single client or app).

When we go beyond all of the hype and the fact that is a 2-way messaging capability on a mobile device, what we have here is that Facebook Chat/Messenger is simply another IM Community – albeit a very large and powerful community.  Most IM services offer interaction to SMS – and Facebook Messages is no exception.  Many people are already familiar with getting SMS from the Facebook short codes.   In the case of the new Facebook Messenger app – it enables the Facebook community to interact with their community via a dedicated app.  Facebook Messenger is certainly a nice new expansion for the Facebook community.   But it is far, far from an “SMS killer.”

To call a service an “SMS killer” is one thing, as these writers claim, but many ignore that this service actually leverages SMS – in fact SMS short codes.  I am not saying that Facebook themselves are making this claim – not at all that I am aware of, but there are many who are writing out there that also claim that Apple iMessage – when it launches is part of iOS 5, this fall, will also be an “SMS killer.”   Again, not so fast – and don’t forget – that iMessage will send its messages via SMS, if the destination is not an iOS device!   Again – a closed community, for the most part – this time, among iOS devices – that uses SMS to reach non-iOS devices. 

Recall, in a previous blog entry, I talked briefly about the Beluga app – a closed group messaging application that used no telephone numbers – consequently, it is quite different than the various TN-based group messaging capabilities that some NUVOs have launched.   Beluga was acquired by Facebook and looks to be very much integrated into the app and group messaging service that was launched, yesterday.  This app simply confirms that Facebook recognizes that the mobile ecosystem is where they need to be.   I would expect many new and innovative things from Facebook, centered on this communications app.  But an SMS-killer, it is not.   Certainly, there may be some slight cannibalization – whereby users cease to use a mobile operator’s SMS for this – but, as I’ve written about many times before – the NUVOs have long since providing alternative and true SMS-interoperability – something that Facebook has not reproduced here.  And while 750 million users is nothing to sneer at, the global SMS community can reach as many as 5.2 billion subscribers, with an average of 70-80% of subscribers in many markets, heavy users of SMS.

Finally, let’s remember that to us within this industry, we differentiate between a real SMS vs. a “text” sent to another person.  Most users do not differentiate, but they do know how to address messages to other people and they will learn to use these apps and capabilities, if they provide the functionality they are looking for.

Facebook Messenger is certainly not an SMS killer; it actually uses SMS (and has, for quite some time).  But so will iMessage and so does the IM services of MSN, AOL, and Yahoo IM, to name a few.  The point is, that technology behind “texting” or “messaging” is evolving – whether from NUVOs, giant social networks, IM communities, or the MNOs, themselves.   Let’s not rush to judgment and call something an “SMS killer,” just because it does not outwardly use SMS or is not SMS-interoperable.

For those of us who closely watch the mobile messaging industry, SMS, the crown jewel of many operators’ data ARPU results is undergoing tremendous change.  This is a natural evolution instead of a revolutionary change.  In previous blog entries and articles, I’ve written about the NUVOs – (e.g. Network Unaffiliated Virtual Operator).  They are sometimes called Over-The-Top Service providers or App-based SMS or simply messaging providers.  I’ve also differentiated the true app-based SMS providers, offering an alternative SMS application with a fully functional E.164 telephone number vs. those that are device app to app and do NOT interoperate with the rest of the telecom industry.   A “true” NUVO interoperates with the remainder of the ecosystem.  That is a key differentiator. 

In recent months, there have been some indicators that have made many think that because apps like WhatsApp or Kik are out there, that they are going to fully replace SMS.  I’m sorry, but that is not the truth… BUT, there is a caveat to that.  I’m going to quote the article KPN Outsmarted by Smartphones by Archibald Preuschat (The Source, from the Wall Street Journal): 

“Text messages, a killer application which for years have generated a decent revenue stream for telecom operators, has become increasingly unpopular in the Netherlands. Smartphone users here prefer to use instant messaging on their devices, like BlackBerry’s Ping or the WhatsApp application which runs on different smartphone operating systems, including Apple’s iPhone. The use of instant messaging for no extra charges, if users have a data bundle, is widespread among young users but not isolated to them, KPN said.

As a result of this trend, KPN’s Dutch mobile service revenue dropped by 8.1% in the first quarter.”

Wow!  What has happened here?   Why is this happening to KPN and possibly other Dutch operators?  I have a theory. 

App based chat or “messaging” programs such as Kik and WhatsApp do not interoperate with the mobile messaging ecosystem.  A Kik or WhatsApp subscriber cannot send a message to a Vodafone, KPN, Verizon, T-Mobile or of the other 5.2 billion subscribers through SMS, addressed by their phone number.  But in many countries in Western Europe and around the world the mobile operators have made it difficult for new entrants (and I’m talking about NUVOs) to acquire phone numbers AND to exchange “domestic” traffic with the mobile operators in their country. 

Why is that?  For one, all of the MNOs are generally GSM operators – they connect to each other bi-laterally via SS7.  They only use messaging hubs for international traffic – not national traffic.  A new entrant has to be accepted (if they can get numbers) and be viewed on the same playing field as the mobile operators.  This is why it has been extremely difficult for NUVOs to get a foothold in Europe and most of Asia, like they are in the United States and Canada.  But, the non-NUVO, app-only-based chat programs such as WhatsApp, which was specifically cited in the article, are popular, as the subscribers want lower cost or free messaging that is now readily available on Smartphone and other connected devices.  The only way for the non-interoperable apps to work is when both parties are using the apps. Telephone Number based NUVOs are not an option, here. 

So, I bet you’re thinking now… How will allowing NUVOs into the marketplace help KPN and other mobile operators?  For this theory, I am drawing from the recent experience of the US operators and trends that I have seen emerging in the US market.

In the last quarter, our messaging traffic statistics has shown that the US operator traffic grew approximately 3% over the 1^st quarter.  That’s good, steady growth.  But, if we drill down, and look at how much of that messaging growth was due to NUVOs being in the market, the results are startling.  My estimates show that overall; approximately 2/3rds of that 3% growth was due to MNO to NUVO traffic.  In fact, some US carriers would have shown a quarter over quarter DECLINE in messaging, if not for the MNO subscribers sending SMS to NUVO subscribers!  

Thinking about it, it makes sense.  US NUVO traffic from MNOs to NUVOs is now well over 1 billion messages per month – accounting for 2-3% of the MNOs outbound traffic to other operators.  Inbound NUVO traffic to these operators is about the same, indicating a balanced ecosystem.  Sure, there are subscribers using NUVOs instead of the MNO’s messaging services, BUT as many or more are using NUVO services on devices other than mobile phones – iPod Touches, iPADs, tablets, even PCs – this simply increases the “universe” of available destinations for all – including the US MNOs. This is true Person to Person traffic.  Even most NUVO users on mobile devices keep their MNO-supplied messaging services and use the NUVO as a 2^nd number as many like to segregate their messaging traffic. 

In Verizon’s recent Q2 earnings discussions, they noted that Verizon Wireless’s data-ARPU was $5.5 billion, up $ 1.1 billion or 22% over the 2^nd quarter of 2010.  Furthermore 39.5% of the total ARPU was data and smartphones were at 36% of the subscribers, up from 32% in Q1.   AT&T posted a 23.4% growth in wireless data to $5.4 billion. 

People want to use whatever telecommunications medium that is popular to reach family and friends – whether that is voice or messaging.  If a messaging medium like SMS comes along, the users are going to assume that it is and should be ubiquitous.  In markets dominated by GSM-only operators, NUVOs are not an option for the myriad of new connected devices that are not smartphones – thus subscribers and non-subscribers alike have no choice but to turn to non-SMS “messaging” apps.  And that WILL cannibalize SMS revenues,  which in turn can lower data ARPUs and can even cost jobs. 

In markets dominated by GSM operators, all “true SMS” is only for GSM operators’ subscribers.  This then completely leaves out the millions of devices that are connected, but cannot interoperate with this GSM-only SMS ecosystem.  To me, that is a problem with unintended consequences.  The users of these apps and devices will turn to their only choice –  non-interoperable solutions (e.g. Kik, WhatsApp, and others).

My recommendation – make it easier for NUVOs to enter the market and assign local phone numbers to apps and devices.  Be open to allowing the NUVO (either directly, or through one of the messaging hubs) to interoperate as if the NUVO were another GSM carrier.   Yes, there will be some cannibalization of SMS revenues,  but the overall universe of SMS-enabled devices will increase substantially.  In fact, some NUVO demographics show that they are tomorrow’s mobile phone subscribers.  

I recently had a look at some rankings of “social networking” apps across both Android and iOS devices in the United States.  The true SMS-based NUVOs all ranked considerably higher than ALL of the non-SMS messaging providers WhatsApp and Kik.  The rankings were based on both app downloads and active users of the apps.  This clearly shows that consumers wanted the messaging apps that were interoperable with the rest of the existing SMS ecosystem.

What this means is that there will be more SMS-enabled devices in the marketplace.  Subscribers will send more messages, which can help recover some of the lost messaging revenue.   

The future should be bright for SMS.  Yes, it is a very mature medium and it will not grow forever.  It is evolving and both MNOs and NUVOs alike are showing really strong, innovative features.  SMS isn’t done – by a long shot.  Yes, there are new players, but mobile operators should not fear them, because, as the current data shows, they can actually help the entire market.

Now that the wraps are off iOS 5, we can start to review what some of the new features and apps will do for the rest of the telecommunications ecosystem.  Since we are a messaging-centric company, among other things, I thought I’d take a few minutes to look at the potential impact of iMessage and what it has the potential to do to SMS and MMS.

First off, iMessage is a closed IM/messaging service between iOS devices – namely iPADs, iPod Touches,  and iPhones (running iOS 5).  So, in a way this is no different than WhatsApp, Beluga (group messaging) and other similar apps.  Note that it is NOT interoperable with Android, Blackberry, Windows and other smartphone Operating Systems and it does not interoperate with the 5 billion SMS capable devices out there today.

Still, in markets where iOS is dominant, you might find some cannibalization of SMS as well as MMS when multiple users with iOS devices begin to use iMessage vs. SMS to text to one another.  iMessage has implications in the Enterprise as well – as there are a variety of new iOS 5 APIs, I would presume, many are around iMessage.  It supports both delivery and read receipts, secure encryption and conversations can be pushed to multiple devices.   iMessage works on both 3G and WiFi networks.

Almost 10 years ago, a handful of companies, including InphoMatch (a predecessor to Sybase 365)  pioneered hub-based SMS interoperability.  Now, messaging hubs account for almost 5 billion messages per day – within the United States and globally.  MMS interoperability via messaging hubs, was first launched by InphoMatch (then, becoming Mobile 365) in late 2004.  Today, mobile messaging has become the most ubiquitous non-verbal communications medium in the history of mankind.  Nothing, not IM, not the various smartphone messaging apps have even come close to cannibalizing this service.  iMessage WILL have some impact, in specific markets, but remember; most of the world still uses and will continue to use SMS for a long time to come.

Since the iPhone 4 was launched, we do not have an interoperable FaceTime (iPhone’s proprietary video chat), even though it was supposedly built with standard interfaces.  But the video chat ecosystem is very weak, with many other incompatible services.  SMS and MMS have a huge global ecosystem in place – one that even Apple, with all of its rather closed garden approach would do well to interoperate with.  Still, given their history with FaceTime, I would not get my hopes up just yet.

Now, don’t count out Android yet, either.  Remember, Android is owned by Google and Google has Google Voice, which includes both Voice and an SMS that is interoperable with the P2P SMS ecosystem. This is why NUVOs are important and should be carefully courted by the existing telecommunications ecosystem.  They are interoperable with everyone else – they use Telephone Numbers as universal addresses and are not limited to a closed system of devices or operating systems.

If iMessage does cannibalize SMS for NUVOs and Mobile Network Operators (MNOs), then by how much? Let’s look at the numbers.  In the United States, ComScore just noted that the Apple Smartphone platform moved to 2^nd place, ahead of Blackberry for 26% market share of the smartphone market.  ComScore, elsewhere noted that approximately 75 million Americans were using smartphones – so that is 19.5 million iPhones in the USA.  At this point, we are just talking about smartphones – no tablets, or iPod Touches yet.  Our numbers, along with those from Informa Telecom & Media note that Americans send, on average, around 950 to over 1000 messages per subscriber per month. Various statistics have shown that smartphone users are, by far, the heaviest users of SMS.  For our calculation, let’s call this 1050 messages per SMARTphone subscriber, per month.  So the potential impact is approximately 20.475 billion SMS messages per month (or more precisely SMS and MMS messages) that might disappear, replaced by iMessages.

CTIA, in their Semi-Annual Wireless Industry Survey, estimated that in 2010, 2.052 trillion SMS messages were sent in the United States.  That’s 171 billion messages per month.  Then our messaging impact could be as high as approximately 12% of the total SMS.   That doesn’t sound quite as bad, does it?

But that’s not the whole story. Apple iPhone users are not going to suddenly stop using SMS.  Because the 12% impact assumes that.  In reality, Apple iPhone users will still use SMS to reach the other 283 million U.S. non-Apple mobile phone users, as well as billions of other people around the world, not using iOS products.  So the real impact is probably at most, closer to 1-3%, if that much, given that these users will continue to send SMS.

I used the United States as an example, but the iPhone is now a worldwide device.  I would expect similar impacts in other iPhone/iOS heavy markets.

Today’s iOS and iCloud announcements will further impact the mobile ecosystem.  I’ll have more to say about several of these new features and what they mean to messaging, mobile enterprise and other areas in the coming weeks.

At the risk of sound redundant, we want to continue to underscore the value of SMS as a communications medium in trying times.  Apparently, according to news reports, a man was rescued after he texted his friend: “I’m alive.”

As with many world and regional events during this year and previous years, the devastating tornado that struck Joplin, Missouri on Sunday the 22^nd of May, 2011, resulted in a surge of attempted communications as friends and families react and attempt to contact loved ones.  In such regional or localized situations, it is well known that many communications facilities would be overwhelmed or rendered unusable.   But, given the highly redundant architecture of today’s mobile networks, one would expect that many tower locations would be spared and potentially continue to operate.  Additionally, from a more regional sense, the wider region should continue to support increased communications traffic, immediately after the event.

After the Joplin, Missouri tornado, we were able to compare the SMS traffic, originating from area code 417, immediately before and after the event with the previous two days.   As expected, in the minutes leading up to the tornado hitting at approximately 5:40PM CDT, the SMS traffic was within “normal” amounts for that time of day.  By 6:00PM, traffic was up 30% and by 7:40PM, as word spread, SMS traffic peaked over 106% of normal and remained high throughout our evaluation period.  In our sample, all US Tier 1 operators were represented, as were several NUVO and Tier 2 operators that utilize 417 area codes.

While we didn’t drill down to specific Joplin area (NPA-NXX), the area wide traffic still surged dramatically, underscoring the viability of SMS as an urgent and reliable communications channel.   There were other storms in the area.  Springfield, Missouri, the largest population center in area code 417 was also struck by severe weather, as were other communities. 

The main Joplin tornado warning was issued at 5:17PM, after a separate warning for “NE Joplin” on a different storm at 5:09PM.  We did not note any unusual increase in Person to Person messaging, leading up to the tornado starting to hit Joplin and immediate areas. 

Although extremely tragic, unlike other events, we have noted, this is an event with a very localized impact.  Outside of area 417 and a few adjacent area codes – especially in Okahoma  — overall messaging was not statistically impacted.  Still as our graphics show, the localized SMS traffic effectively doubled after that – whereas voice – both fixed and mobile may have been disrupted, due to communications infrastructure damage.   SMS can work with lower signals, when a mobile voice call may not be possible.

For alerts, do yourself and family a favor and please sign up for severe weather text alerts.  Places like the Weather Channel and many localities offer these.  Simply Google:  “severe weather text alerts.”  Without ample warning, the situation in Joplin and in Alabama, last month, would have been much worse.  SMS alerts can reach you when you are away from home. 

Finally, don’t forget that you can always text REDCROSS to 90999 to donate $10 to help the Red Cross support relief for recent tornado victims across the country as well as the recent flooding victims.

As we’ve recently finished another round of the  Austin, Texas based South By Southwest (SXSW) extravaganza, there has been a great deal of media attention to a number of “new” alternative messaging providers:  Kik, Beluga (recently acquired by Facebook), Fast Society, GroupMe, What’s App, TEXTme, and Ping Chat to name a few.   There are so many, I’m starting to lose track.  

You’ve all heard me discuss NUVOs – the Network Unaffiliated Virtual Operators, AKA Over-The-Top (OTT) service providers.  However, I think now, with all of the recent publicity about these alternatives to SMS messaging (and MMS as well), we need to take a step back and try to understand just want is the difference between this crop and the more established NUVOs including MediaFriends’ HeyWire, Pinger’s TextFree, Gogii’s TextPlus, Google Voice and Toktumi Line 2.  There are several distinct differences and some may determine whether these companies ultimately succeed or fall by the wayside.

Telephone Numbers

This is by far, the biggest differentiator that the true “NUVOs” offer.  Without Telephone Numbers, the messaging service, no matter how brilliant, cannot interoperate or interact with the largest, most comprehensive social network or all – the 4.5+ billion SMS users around the world.  This is a key differentiator of HeyWire, TextFree, Google Voice, TextPlus and Line2 – they all assign TNs to their subscribers.  

Many of the newer one’s, without assigning telephone numbers, call themselves “texting” applications – true you enter text and can send messages to other subscribers of the same service – but to anyone with a mobile device?  This is not possible, today.   Conversely, how can someone with a messaging application, but not on the same service reach out to someone within another group?  Again this is not possible, unless both utilize telephone numbers as a global addressing standard.

This is why we have international standards.  Today, a TextFree subscriber can send and receive messages from a Google Voice subscriber or a HeyWire subscriber just as easy as they can exchange messages with a mobile network operator (MNO) such as Verizon or T-Mobile or Vodafone.  The common addressing mechanism?  Telephone numbers.  International standard telephone numbers.  Until there is an international and interoperable addressing mechanism that is backward compatible with the E.164 telephone number, there will not be such a global community of the scale to today’s world telecom ecosystem.

Interoperability

In the early days of SMS, one of the single factors that helped SMS reach the heights of ubiquity that it enjoys today was interoperability among different operators.  These newer “texting” applications do not enjoy that same benefit.  Consequently, all they have created are disparate islands.  While I wish all of them the best of successes, I do worry that, at some point, their business model may collapse, as they ignore the benefits of becoming interoperable with other services.  Perhaps some will gain enough subscribers and momentum to become a viral and disruptive technology.  Certainly, the micro-blogging service, Twitter has done that.  But, then Twitter is not a Person to Person communications medium, like texting is. 

Innovation

What truly amazes me is the significant amount of innovation coming from the NUVOs.   They all have significant differentiators – in fact, if you look at each one individually, you’ll see features and capabilities that you wish you had on whatever service that you have chosen to use.  One significant feature that most are implementing in unique ways is the ability to create and label groups or communities within their ecosystem and some extending to others (again, via the use of phone numbers).   When a group member sends a message to others in the group, all group members will receive the message.  Group administrators as well as members can control how messages are received.  GroupMe assigns Telephone Numbers to groups, so individuals with other numbers (or on other services) can access groups via the a specific TN.   You can try them out and see for yourself how each are differentiated.  Some true NUVOs are messaging-only (HeyWire, TextPlus) ; others are messaging and voice (TextFree, Line2, Google Voice).

Facebook and Beluga

Now let’s circle back to the non-TN, OTT players.  I don’t call them “NUVOs” as they don’t quite fit what I consider the “classic definition.”   Facebook made a easy move towards this space when they acquired tiny Beluga – a pure Group Messaging player.  But Beluga has not been using TNs for their subscribers.  Furthermore, Facebook has made several statements as to how “relatively soon, we’ll probably all stop using arbitrary 10-digit numbers and bizarre sequences of characters to contact each other. We will just select friends by name and be able to share with them instantly.” As noted in a previous blog (and article in Network World), I think that is going to be a tough sell.   It still remains to be seen what Facebook will do with Beluga, but this industry will be watching closely.  Facebook Chat does not have a strong “group chat” capability, so I do presume that is where they will focus Beluga’s technology.  As to “taking aim at the messaging cartel,” I’m not sure that Beluga was the optimal choice to incorporate that would give them that “power.”  Still 500 million subscribers is nothing to sneeze at and they continue to grow in both subscribers and influence.   

Future Directions

Don’t count out the incumbent Mobile Network Operators (MNOs) by any stretch of the imagination.  While NUVOs are innovative and growing in influence and reach, they are still relatively small.  After all, 5 billion global subscribers aren’t all of the sudden going to stop using SMS, MMS, and their own MNO’s voice services.  MNOs have a long history of innovation, themselves.  They got us to where we are today, making it completely possible for NUVOs and other potentially disruptive technology to exist.  I would even venture to say that powerhouses like Facebook would not be where they are today, were it not for the global MNO community.   As we have just completed the 2011, spring CTIA trade show in Orlando, SXSW, and Mobile World Congress, there is plenty going on – not withstanding, the potential upheaval in the US market in the next 12-18 months.  The NUVOs are still primarily a North American Numbering Plan phenomenon.  They have done a great deal to help messaging grow, as they are greatly expanding the “universe” of devices that support P2P communications such as messaging and voice.  MNOs know this and are and will continue to be watching how they can partner with and leverage these innovations to retain and grow subscribers as well as protect and grow ARPUs. In fact, this type of MNO and NUVO partnering is now happening.  Sprint and Google Voice announced at CTIA that Sprint subscribers may use their mobile TN as their Google Voice number.  This is absolutely HUGE and shows just how an independent NUVO can easily partner with an established MNO.  A brillant and brave move for Sprint and one that will likely pay off, well.

During this year, it is likely that NUVOs will begin to pop up in other countries, witin those countries numbering plans.  Furthermore, you may see partnerships between NUVOs, ISPs, and new generation IP network providers.    Stay tuned and watch closely, because this part of the industry does and will change rapidly.

Last March, I published a blog entry titled: SMS may be the Only Reliable Communications Channel During Significant Events.    That explained why SMS usage was encouraged when there were few other possibilities for people to reach out to others after the strong Chile earthquake on the 27^th of February, 2010.  Based on the events of this year, alone, that message bears repeating again: 

When mobile communications channels are not completely destroyed or disrupted, SMS is a very reliable method of communicating.

In fact, after the recent New Zealand earthquake on the 22^nd February, earlier this year, there were notices from authorities through a variety of media types, including Twitter stating:  

#Earthquake: Keep cellphone calls short, or use SMS - #New Zealand…

Sybase is in a unique position, as it is able to track SMS traffic trends around the world.  The devastating earthquake in Japan, today struck at 14:46 JST.  International SMS traffic peaked in the 16:00 hour and has continue to remain at much higher than normal levels.

Last month’s New Zealand earthquake showed similar results and the traffic stayed at higher than normal levels for several days, until the situation was more stabilized. 

Of course, through this year, we have seen numerous ups and downs of SMS service in Egypt, during the initial protests, with Internet and international SMS disrupted, to see it restored and the huge surge of texts, when it was announced that Mubarek had resigned.  Libya has also seen its share of SMS disruptions that continue, for a variety of reasons, to this day.  The ubiquity and strong penetration of SMS users also makes this medium a target for disruption in certain situations.

Despite all that we have, worldwide, now:  Social Networks, Twitter, Online and Mobile media, various chat groups and IM services, it is still SMS that people continue turn to.

Reminder:  You can text REDCROSS to 90999 in the United States to donate to the Japanese relief effort.

This year’s Mobile World Congress in Barcelona topped attendance records with over 60,000 participants.  In my opinion, this mega-trade (8 FILLED halls) show keeps getting better and better and this year continued to reset expectations.  We found our stand traffic extremely active, with several very nice prospects visiting us, unannounced.  Of course, as we had almost 100 meetings scheduled, we were a busy bunch.  I believe we even closed some business, here.

This year, general themes were mobile broadband, specifically LTE deployments and technology, Android Apps and ecosystem, new handsets and tablets, and mobile payment solutions. 

Handset vendors were still the biggest advertisers and booth builders, with none larger than Samsung’s Galaxy S II .  The S II is certainly to be one of the premier Android handsets of 2011, supporting a 4.3” Super AMOLED display, support for HSPA+ up to 21Mbps (some carriers will call this “4G”), with many more unique features such as an 8 megapixel camera with LED flash, full 1080p HD recording & playback, voice recognition and translation and a “Social Hub.”  The Social Hub enables users to organize and synchronize all contacts and services such as SMS, IM, and social networks (Facebook, Linked In, Twitter, etc) into a one unified box.    The unified in-box concept is not new – Facebook has incorporated it as are several NUVOs providing similar unified messaging / IM / chat concepts as well.  Of course, like many other handsets being introduced, the Galaxy S II includes Near Field Communications (NFC).  The Galaxy S II also contains on-board device management, courtesy of Sybase Afaria  as one of its many Enterprise-class feature sets that will likely make this phone quite useful in business ecosystems. 

Android was everywhere and the hot collectible were 86 of these Android pins. I’m not sure I know anyone that really got more than one or two.  Still, a very nice marketing concept!

Not to be outdone, LG Electronics was demonstrating their new 3D (yes, that’s three dimensions, not 3^rd generation) mobile device called the Optimus 3D .   This Android handset enables you to record, share and view 3D video without the use of glasses.  I saw this and wasn’t particularly impressed, although, video shot with this handset, displayed on the 3D compatible television monitor, looked much better.  I guess it will have its niche market and its fans.  Not sure if 3D mobile handsets will catch on too much at this point. 

Like the recent Consumer Electronics Show in Las Vegas, the MWC was also a show of tablets.   Most were various versions of Android and ranged from well known tablets expected from Samsung, and LG as well as ViewSonic, Huawei, Acer, Motorola  (Xoom), HTC and Toshiba.  Frankly, given that they are all Android-based and that many of them use different versions of Android, ranging from Version 2.3 to 3.0, what will that do to app compatibility?   Hopefully, the Android Tablet market will quickly converge on Android 3.0 “Honeycomb.”   When I saw RIM Playbook, it seemed like a nice little tablet; however, colleagues noted to me that they saw it crash and it seemed rather “sluggish” in its performance.  

I would like to note that, despite all of the recent tablet launches at CES and MWC, Apple’s upcoming iPAD 2 introduction still seems to generate more twitter and news buzz, than all of them put together. 

I attended an RCS (Rich Communications Suite – a GSMA initiative ) presentation where operator groups consisting of Deutsche Telecom, Orange, Telecom Italia, Telefonica, and Vodafone all announced that they were launching RCS services in 2011 to 2012 in several European markets.   RCS enables subscribers to use IM, share live video and share files such as photos simultaneously, during calls, regardless of network or device.   RCS also enables an active address book.  Subscribers will be able to see the services available to him by contact name.  This core group of operators is working with various handset OEMs to ensure that the service is integrated in address books.  I would still suppose that we’ll see 3^rd party smartphone applications that support an RCS address book and functionality, in lieu of this capability being built into the OEM devices.   I am hopeful that RCS will see some commercial success and uptake by these core operators.   RCS is what the now-defunct GSMA Personal Instant Messaging (PIM) initiative morphed into.  PIM was not successful, in that it simply created another closed IM community to compete with the too-many, non interoperable ones, already in place.  

SK Telecom has launched a nice RCS video calling service they market as “HD Videocall.”  This enables subscribers with Android devices to launch video from voice calls, launch video calls directly from the app, share contacts, launch a sketch book with the video and share files.  Subscribers can also share their locations with friends.  I saw an impressive demonstration of this service.  Sadly, it is only available within SK Telecom at the moment, but the engineer I spoke to said he was hopeful that it could interoperate with other Korean operators in the future (no time frame given).   RCS is a technology, if treated right by the operators and 3^rd party application and client providers, could provide a needed boost to MNO services like mobile messaging did and still does.

Another interesting demonstration that I saw, was Verizon’s Voice over LTE  .  Verizon actually set up a small LTE radio network within the show confines for the demos.  VoLTE should be a higher quality voice service and will roll-out into production sometime in 2012.  The demo that I attended was indeed a very high quality voice call and was quite impressive, considering the heavy background noise of Hall 8.  I believe that high-definition voice calls will be coming to a network near us all, soon.  Certainly, LTE has enough bandwidth to ultimately replace Circuit-Switched voice, but this won’t be for years.   I think that VoLTE has IPX voice transport written all over it.  

Finally, in 2012, Barcelona will host the Mobile World Congress for, what could be, the last time.  The GSMA is in the process of selecting a potential new location for the 2013-2018 MWC .  The finalists are Paris, Munich, Milan and Barcelona for another 5 years.  For me, I am hoping for Barcelona for another 5  years.  This city really pulls out all of the stops for the MWC and it is certainly good business for Spain and Barcelona.  They do a great job. 

And after at least 3 years, no one still knows what CBOSS does.