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  -> NCL looks west after Vodafone deal - September 2003

By Matthew Clark, ElectricNews.Net

After signing a deal with Vodafone Ireland for its new MMS application toolkit Provato, Irish firm NCL says it's eyeing the US market for its older technology.

The five-year-old Dublin firm this week announced that mobile operator Vodafone Ireland is to use its software, called Provato SMS/MMS Gateway, to develop new MMS (multimedia messaging) applications for its subscribers. The deal is one of the first for NCL's Provato, and the company said that Vodafone Ireland's decision to take up the technology should help it to attract even more customers. The value of the deal was not announced.

Provato is a package of development tools that let companies and application developers create new MMS services such as news alerts with pictures and sound, multimedia advertising and games and customer relationship management (CRM) tools. The toolkit also allows developers to create SMS, Push WAP, EMS, Nokia Smart Messaging, and long message applications for mobile phone users.

So far, one of NCL's biggest revenue drivers is Swift Note, a precursor to Provato, which is a development package focused mainly on SMS. James Noctor, NCL's CEO said that the company already has 50 customers, many of whom are using Swift Note, and the company is now looking to the US for more. "SMS is growing in the US," Noctor told ElectricNews.Net. "Here in Europe, MMS is the growing market but we see the US as place to continue to target SMS application developers."

Indeed, IDC recently predicted that by 2007, there will be as many as 75 million SMS users in America, up from about 21 million users in 2002, and revenue from the service to mobile operators will rise to about USD1.9 billion in four year's time. Still the US market must be put into perspective: SMS traffic in the US amounted to 2.4 billion messages last year, compared to a staggering 186 billion messages in Western Europe, according to industry estimates.

But with the saturation of the European SMS market, Noctor said NCL is betting on the substantial growth of MMS in Europe to drive sales on this side of the Atlantic.

Although the European MMS market is pegged to grow significantly, use of the much-hyped technology has not followed the pattern many in the industry predicted a year ago. Unlike SMS, MMS has not been taken to heart for person-to-person (P2P) mobile phone messaging, partly due to the cost of the data intensive messages and also because of interoperability troubles between networks.

In fact, many analysts have forecast that MMS's real strength will be business-to-consumer (B2C) messaging, which only accounted for a relatively small percentage of SMS traffic. According to Noctor, the MMS format is perfect for delivering colourful and compelling news alerts and ads that can capture a consumer's attention in a way that SMS can't. "We see huge potential in that market and that's the direction we are heading in [with Provato]," he said.

Others agree. As far back as last year, UK consultancy Juniper Research concluded that MMS has the potential to generate revenues in excess of USD8.3 billion by 2004. But the company said that USD5.6 billion of that will be generated through content delivery and provisioning, rather than pure peer-to-peer messaging, which would generate USD2.7 billion.