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Sep 23 2004

According to Ovum, the outlook is good for the European ringback tones market. The opportunity is not as big as in Asia, but mobile operators should go for it as it represents a valuable addition to the existing portfolio of personalisation services.

Ovum's recent research into the mobile music industry shows that healthy growth can be expected for this particular form of phone personalisation over the next five years. Ovum forecasts that revenues will remain small this year at around US$16 million in Western Europe, reaching a respectable US$721 million in 2008. That is around 30% of total global revenues from ringback tones.

While operators will still be involved in complex business models with their partners, they won 't be facing competition from third parties. Only network owners are able to offer this service. As yet, there is little to differentiate the European service offerings. Most operators offer a basic subscription service at launch - with the exception of Telefonica, which only charges per event.

'Differentiation will be difficult to achieve, but this is one area where service providers will be able to take advantage of exclusive deals. For example, promotion of a new track by a top music group. There will also be opportunities to bundle the exclusive promotion with other personalisation applications such as mastertones and software skins,' comments Michele Mackenzie, Senior Analyst and Service Manager for the WirelessMultimedia@Ovum advisory service.

In South Korea, SKT 's ColoRing service achieved 30% penetration in its first year of launch, and it currently generates around $8 million per month. Likewise, more than 100,000 Globe Telecom subscribers signed up in the first week when the operator launched in the Philippines earlier this year.

However, it should be remembered that not all of the services have experienced the same high rates of success. For example, NTT DoCoMo and M1 Singapore 's ringback tones services have not done so well, and we have identified a number of factors that may have contributed to this:

the ringback tone service is difficult to explain and market. It is not immediately obvious to the user how it works and is often confused with functionality on the handset to assign different ringtones to different callers for the benefit of the called party

management of the service is complex. In addition to the complexity of implementing the solution in the network, service providers still need to manage their content providers, negotiate and manage licensing terms and conditions for the content, and ensure that there is a constant flow of new dynamic content

tastes and preferences. There may be cultural differences to take into account across markets. For example, a service that appeals to the Korean market might not necessarily appeal to the UK market.

T-Mobile was first off the starting blocks in Europe, launching its Caller Tunes service in December 2003. There were no spectacular announcements within the first few weeks of launch, suggesting that it was taking longer to catch on in the UK market. At the end of June 2004 T-Mobile announced that it had achieved 500,000 subscribers across the UK, Germany and the Czech Republic. While this figure is much lower than some of the Asian operators' reports, it does show a healthy uptake of the new service and represents a valuable addition to an operator's portfolio of personalisation services.

Since T-Mobile's launch Ovum says that it has seen a wave of other launches by Vodafone Germany, Telefonica Spain and Tele2 Sweden. Many other operators are proposing to launch before the end of the year.

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