SMS is no longer just mobile

The launch of Bharti Teletech’s phones in India will enable fixed line users to send text messages. Even though the new service allows users to send SMS and e-mail, the cost of upgrading the network and replacing existing handsets might result in a slow takeoff, says Rahul Neel Mani

Imagine sending a short message text mail from your fixed line phone. Bharti Teletech and Bharti Telesoft have recently announced the production and distribution of the first ever next-generation fixed line phones with SMS facility in India. Bharti Teletech—the largest manufacturer of fixed line terminals in India—will be launching this SMS phone with Bharti Telesoft, which will provide the software interface, scalable for inter-operator compatibility. So far the SMS domain was a monopoly of wireless players. But now there is the fixed line option as well.

Although sending a short message from a fixed line is not a new concept, it is only now that users in India will be able to experience it. SMS through fixed line phones will prove to be a new opportunity for nearly 40 million fixed line users and for service providers, who were waiting for a new revenue generating value-added service. This solution, developed jointly by Bharti Teletech and Bharti Telesoft (Bharti’s software arm), renders the systems of fixed line service providers compatible for sending and receiving SMS messages. The two companies have invested substantial amounts in developing this solution. "With this new service, India will now be joining a select band of countries that offer SMS from fixed lines," says Rakesh Bharti Mittal, vice chairman and MD of Bharti Teletech. Since this service was introduced for the first time in the world by Telecom Italia in the year 2000, 12 more countries have joined the bandwagon. These 12 include Austria, Belgium, France, Germany and Asian countries like Philippines.

As a matter of fact, the world over SMS has proved to be a popular information and communication tool both on GSM and fixed line platforms. SMS accounts for around 15 percent of GSM operators’ revenues in Europe and Asia and 4 percent in India. The trend is fast catching up in Asian and African countries. For example, among the first few adopters of this value-added service in South Asia will be Sri Lanka, which has placed an order for 2,500 phones with Bharti Teletech for its pilot project. The deal for a fixed line SMS server is also in the pipeline and if it works out then that will be the first implementation of its kind in this region. "We are talking to each and every fixed line service provider in India and a lot of them have shown considerable interest in this service," says Mittal.

The SMS services solution will be offered to fixed line service providers as well as GSM providers who are likely to gain from the increase in SMS traffic from wireline networks. This platform is scalable as per network capacity and volume of users and thus offers operators the option of staggering their entry cost in line with growth of consumers and volumes of SMS usage. Users who don’t have a SMS feature phone at their end can also send and get SMS by using IVR (interactive voice response) technology," says Sanjiv Mittal, CEO, Bharti Telesoft, the software arm of Bharti. "Wireline subscribers can now subscribe to data services with this phone, which is an apt solution for application messaging," he says. This SMS facility, as per global standards, can currently support up to 160 characters, scalable up to 640 characters in the future.

If we observe the present trend closely then we will see mobile messaging being a runaway success in markets where GSM has been the dominant standard. The leading operators around the world for SMS on fixed line service are—Singtel, PLDT, Matav, Belgacom, Telecom France, Eircom, Telecom Austria and Telekom Italia.

Although the primary target of Bharti Teletech will be the export market, as soon as the company sees operators offering this service in India they will provide the equipment and SMS server platform here as well. The investment in a SMS server can be anything between $200,000 to $1.3 million, depending on the scale of service and size of customer base of a particular service provider. The cost of the phone in India is pegged at approximately Rs 2,100. Looking at the costs in enabling this whole application, service providers will have to shell out a few million dollars, which might be difficult in India until they are convinced of a definite revenue stream emerging from the usage.

Even up to 5 percent of total revenues will set the ball rolling, but then they have to deploy an SMS server and replace existing customer premise equipment with the new SMS-enabled phone. As on date at least 85 percent of phone users (of the 40 million subscribers) use the simple push-button featureless fixed line phone. Although features like call duration, timer, LED display and caller line identification (CLI) will be standard features of a fixed line phone, value-added SMS service will need some aggressive selling if it has to make an impact. Currently users install cheaper external devices for the caller ID function. Phones that Bharti is talking of—the likes of SMS phones and e-mail phones—might take a long time to penetrate the user base in India due to the cost factor. Although the company says that it is targeting all the 40 million users, it can consider itself lucky if it is able to tap even 10 percent of this base.

This is the reason why company is currently looking at the Middle East and African markets as export targets in the immediate future. Bharti Teletech is also in the process of making e-mail available within six to eight months. Initially, these phones will come from China where they are manufactured exclusively for Bharti Teletech. Later, with the expected rise in volumes the company plans to shift the manufacturing base to its Gurgaon factory, which now produces four million phones a year and is one of the largest fixed line terminal manufacturers in the world outside China.

Fixed line SMS globally