Text messaging industry pauses over send button

Conflicting text messaging research indicates the jury is still out on whether the technology has enough momentum to take off in Canada like it has in other parts of the world.

One recent study conducted by Toronto-based NFO Cfgroup

concludes that Canada’s text messaging market remains “”stagnant.”” The annual wireless telephony study found less than one-fifth of online Canadian adults send short-text messages on their cell phones. These figures have not changed since the Toronto-based firm conducted its 2002 study.

These dismal figures are particularly surprising since the Canadian Wireless and Telecommunications Association (CWTA) recently reported that the volume of text messages doubled from 10 million a month prior to April 2002 to about 20 million for the month of November 2002. In April 2003, the association reported 26 million text messages had been sent in Canada.

Given this increase in message volume, CWTA President and CEO Peter Barnes doubts the accuracy of NFO CFgroup’s findings.

“”It’s hard to rationalize the fact that there are no new customers when, in a year, there has been 150 per cent growth in volume,”” he says.

Renowned IT titan Michael Cowpland is also unfazed by the Toronto firm’s findings, insisting the demand for text messaging in Canada has “”taken off like a rocket”” and is bound to catch up to other countries.

The initial boom in Canadian-sent text messages coincided with a major announcement by Canada’s four largest wireless carriers. Last year, Bell Mobility, Rogers AT&T Wireless, Microcell Connexions and Telus Mobility combined their services through an Inter-SMSC Router (ISR) from CMG Wireless Data Solutions. The router bridged all of the major mobile network technologies, making them interoperable. Just last January, cross-border interoperability was introduced, enabling wireless phone customers to exchange text messages between U.S. national wireless service providers and major Canadian counterparts.But despite these developments, David Stark insists that Canada’s inter-carrier service has yet to attract new adult users.

“”Text messaging in Canada, compared to Europe and parts of Asia, just hasn’t caught on,”” says the public affairs director at NFO CFgroup. He point out that the U.K.’s average number of text messages sent in a day amounts to 50 million, or 1.54 billion per month.

It could be that Canada is adopting a unique e-culture, he says. Local phone service in Canada is comparably cheap, with telcos offering a flat rate. In Europe, however, local phone calls are metered.

“”So perhaps there’s a cost pressure (for Europeans) to connect to the Internet, which may explain why the use of text messaging and Web-enabled phones is higher (there),”” says Stark.

But Cowpland, owner of Ottawa’s ZIM Technologies International Inc., sees things differently. He says young Canadians have picked up SMS quickly. It is only a matter of time until the majority of online adults become aware of the technology’s many applications.

“”Once people discover the medium, they love it,”” he says from his Ottawa office, suggesting that more and more Canadians will become aware of the benefits of SMS. “”It’s just a matter of the snowball effect.””

Indeed, the potential for growth is there, Stark says. According to his firm’s study, one quarter of non-users reported that they are interested in trying text messaging in the future.

Helping to raise awareness of text messaging are shows such as “”Canadian Idol,”” which premiered Monday, says Barnes. The talent-search TV show — an “”American Idol”” spin-off — features the technology as one way for viewers to vote for their favourite contestant.

“”The awareness of (text messaging) is bound to increase thanks to things like this,”” says Barnes.

Cowpland adds SMS will catch on because of its practicality.

“”It’s nice to have something to roam with you without having huge costs. Who wants to come back from a trip and have an $800 phone bill? Alternatively, each (text) message costs five to ten cents.””

Cowpland calls SMS “”a very powerful business tool”” because of its ability to replace pagers. There are still 40 million pagers in North America that could easily be replaced by text messaging at low cost, he says. “”The average pager costs $20 a month. But you can achieve the same functionality with text messaging for $5 to $10 a month. And you don’t have to carry two devices.””

Cowpland estimates 400 billion text messages will be sent worldwide this year, which translates into $20 billion in revenue.

Stark point out that, in terms of growth and use, “”text messaging is where Internet and Web sites were about 10 years ago.””

Significantly, the wireless telephony study also found the popularity of Web-enabled phones has gone up. In November 2001, eight per cent of online Canadians owned a Web-enabled cell phone. Just 14 months later, more than 12 per cent owned such phones, amounting to a 50 per cent increase.

The study also noted that only one per cent of online Canadians owned a cell phone that has a built-in digital camera. One-third of respondents said they were interested in buying “”photo-phones.”” Meanwhile, video-phones appealed to about 30 per cent of respondents, while 57 per cent said they weren’t interested in seeing the person they were talking to.

A total of 1,037 online interviews were completed by NFO CFgroup, garnering a 37 per cent response rate. The survey results are nationally representative of the online Canadian adult population and are considered accurate within 3.1 percentage points, 19 times out of 20.

Comment: info@itbusiness.ca

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Jim Love, Chief Content Officer, IT World Canada

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