SMSs becoming lucrative

  • 2002-06-20
  • Aleksei Gunter, TALLINN
Now that every second person in Estonia owns a mobile phone the battle for new clients is intensifying and the joys of the SMS (short message service) are being touted as the chief benefit of going mobile.

Few people were interested in SMS-ing a decade ago when mobile communication became available in Estonia. What was the point of pushing tiny buttons for three minutes to write merely one sentence, when you could call a person and look cool holding a chunky receiver to your ear?

But today psychologists and telecommunications experts say that your typical Estonian prefers to send an SMS rather than call in person, especially when it comes to dealing with sensitive topics.

Estonia's three mobile communications operators have now put SMS-ing at the center of their efforts to win young customers.

Tele2 has lowered the price of using SMS during the school holiday period between June 17 and the end of August from 2.50 kroons ($0.14) to 0.25 kroons, while Radiolinja Eesti has launched a new package for younger people with cheap evening calls and a charge of 1.75 kroons per SMS.

Both EMT and Tele2 are reluctant to reveal the number of SMS messages their clients send, but about 60 percent of EMT's subscription clients and half the users of EMT's prepaid cards use SMS.

An average Radiolinja client sent 10 to 15 SMS messages per month in 2002, which is 20 percent more than last year and at holidays like Mother's Day and Christmas the number of messages increases by up to nine times.

The figures in Estonia are following worldwide trends. According to an industry study, mobile phone users sent an estimated 2 billion SMS messages in the first four months of this year, a 50 percent increase over last year. An estimated 156 million messages are sent per month in Europe.

There are approximately 710,000 mobile phone users in Estonia. At 2 kroons to 2.50 kroons per SMS, mobile phone companies make an estimated $530,000 per month from the service.

Companies are increasingly offering more services through SMS that are likely to increase users.

Demand for information such as weather updates and sports results from Radiolinija via SMS has risen 60 percent in the last 12 months, the company said.

SMS is particularly popular among Russian speakers, perhaps because they are keen to communicate using the Cyrillic alphabet which is not available on many workplace e-mail systems, said Kaja Pino, EMT's spokeswoman. In addition to person-to-person communications, SMS is increasingly being used to deliver a range of additional services such as quiz games. Cars can warn their drivers by SMS if someone is attempting a break-in, or if the battery is dead.

About one-third of payments for parking in Tallinn are now made via SMS or WAP, according to the security company Falck Eesti, which operates the city's parking lots.

In the first four months of this year Tallinn municipality made three times more in revenues from parking than it did in the same period last year, in part due to the popularity of paying by SMS, say municipal officials.

EMT is anxious to exploit the advertising potential of SMS and now distributes a list of people who have said they are willing to receive promotional material by SMS.

The uses are myriad, said Pino. "One blood transfusion center in northern Estonia calls up potential donors when they need a specific blood type via SMS," she said.

EMT, the largest network operator, launched its Airport SMS portal, which allows Internet users to send short messages for free to EMT clients, in cooperation with Delfi portal earlier last year.

Coming soon is MMS, or multimedia messaging service, which will enable people to send animated messages with sound, photos and videos. EMT is testing the service now, and Tele2 and Radiolinja are due to start tests soon.

MMS is expected to catch on as the price of phones supporting MMS falls. The price of sending a multimedia message could initially be between 5 kroons and 10 kroons, said Radiolinja Eesti's spokeswoman Helena Lohmus.

Meanwhile sales of ordinary GSM mobile phones are declining, with 36,000 new mobiles sold in the second-quarter of this year compared to 45,000 in the same period last year, according to the daily newspaper Aripaev.

An average mobile phone owner gets a new phone every two years, and second-hand phones are usually bought by users of prepaid cards.