Next Big Ring

Customised Ring Back Tones are being pitched as another opportunity for mobile operators to raise cash from multimedia services. But launching them may not be as simple as it first seems

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By  Richard Agnew Published  July 28, 2004

|~|ring1.gif|~||~|Annoying as it may be to some, the ring tone sector just keeps growing. While other mobile applications have not lived up to their billing, ring tones now support a multi-billion dollar industry and providers are looking for ways to get users to listen to them more. One idea is the customised ring back tone (CRBT), which has already proved successful in the Far East and is now being taken up elsewhere. CRBTs are basically a natural progression of the ring tone market. Users pay a fee so that people calling them hear a melody, sound clip or message, instead of the normal series of beeps. Equipment vendors are touting the application as an easy opportunity for operators to increase user spending on both data and voice. As CRBTs are infrastructure-based, networks can also exert more control over the service and gain a larger slice of the pie. Thailand’s AIS is one Far Eastern operator which has seen rapid growth from CRBTs after launching them in December last year. The provider, which now serves over 13 million GSM subscribers, recruited Huawei Technologies to implement the system on its existing intelligent networking (IN) platform. By June, the mobile operator claimed to have signed up around 2.4 million users — from which it earns at least US$0.70 per month each in basic fees. According to Gao Zhihua, deputy director of Huawei’s S&S international marketing department, the aim is to sign up 4 million users by the end of this year. AIS also receives a sizeable share of the revenues gained from the service as it stores the melodies on its own network. It gains 100% of the subscription and browsing fees and 50% of downloading charges — US$0.35 per melody. “Currently, about 1.3 million subscribers dial in to download per month,” says Suvit Arayavilaipong, AVP of AIS’ wireless service business. Outside the Far East, interest in CRBT is growing. Research group, Ovum, predicts that the global CRBT market will be worth US$352 million by the end of 2005. Various European operators have also launched the service or are planning to, including Vodafone, T-Mobile, Orange and O2. “It’s a service that could succeed anywhere in the world,” says Robin Simpson, research director for Gartner’s Asia Pacific division. “RBTs are a means by which operators can cheaply provide a value added service. End users really want to customise their handsets — it’s that simple,” he adds. As with other services, uptake in the Middle East and Africa is expected to be slightly behind other regions. A quick straw poll of Wataniya, Batelco, and Qtel found that none had concrete plans to deploy CRBT, but all were monitoring uptake elsewhere. “They’re on our list for next year,” says Ross Cormack, executive director, wireless services, Qtel. “We believe that they will be particularly attractive for the youth market, which is large in both Asia and the Middle East,” he adds. CRBTs are also not a service which operators can just launch and walk away from. One challenge that providers have faced is how to persuade subscribers to keep downloading songs once they have got over their initial interest in the service. To overcome this, AIS recruited 15 content partners and required them to regularly upload new melodies. “When we launched CRBTs, we had to try and convince people to sign up to the service to start with, but also that the more songs they downloaded, the cooler they were,” says Arayavilaipong. “You also need to refresh the content regularly — we started with hundreds of melodies and required the content providers to update their services every two weeks,” he adds. Another issue that operators take on when launching CRBTs is that of copyright. One advantage of the service is that melodies are stored on the operator or content provider’s network, allowing greater control of distribution. But in the Middle East, operators say that the legal framework surrounding the payment of song royalties still has to be clarified. “CRBTs have been successful in Asia but there are some implications,” says Andrei Torriani, chief product development & technology officer, Wataniya. “In the region, there’s no syndicate that deals with copyright, so it’s kind of a Wild West scenario legally. If you don’t understand who you need to make payments to, then you’re heading down a road which could lead to long litigation,” he adds. At a technical level, providers have also pointed out that the implementation of CRBTs can lead to voice capacity problems or a need to update exchanges to handle the new load. “CRBTs can be a Trojan Horse,” says Torriani. “There can be an effect [on capacity] as calls are taken from the main switch to the RBT platform and back to the switch. This, from a capex standpoint, can have a significant impact and we need to understand that impact better before we can commit to a launch,” he adds. AIS, for example, experienced problems shortly after making the service available. But it puts them down to user behaviour and the fact that it under-estimated the rapid growth in subscribers that took place from day one. “When people downloaded a CBRT, they would phone their friends to ask them to call them. They then wouldn’t pick up the phone so their friends could listen to the tone. This led to capacity problems,” says Wichian Mektrakarn, AIS’ EVP of operations. “Also, we thought that in the first three months, we would get 500,000 subscribers. After two weeks, we realised that there were going to be many more than that. We had to put our promotions on hold while we did an upgrade,” he adds.||**||

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