With the runaway success of SMS, which now accounts for 10-15 percent of some operators’ revenues, many mobile carriers see MMS, with its more advanced messaging features, as a catalyst to push forward 2.5G and 3G applications. Ovum, however, predicts that SMS will continue to be the predominant technology for the next two to three years, and not until 2004 or 2005 will MMS begin to make its imprint on the market.

Ovum estimates that MMS will be worth around $70-billion globally by 2007, with more growth still to come, says John Delaney, principal analyst at Ovum. "Around $31-billion of this will come from person-to-person messaging, with a further $39-billion from the entertainment and information services that MMS will enable — machine-to-person messaging," Delaney explained.

In its study, ‘MMS and SMS: Multimedia Strategies for Mobile Messaging,’ Ovum looks at those mobile carriers, about 20, who are currently investigating or testing or planning to launch MMS by the end of the year. For example, Norway’s Telenor was the first operator to launch a commercial MMS-based service, and Vodafone’s German operator D2 also has plans to launch a wide-scale service at the end of July.

"MMS does everything that SMS can, plus more," Delaney explains. But he advises mobile operators that seeing "MMS as a kind of SMS on steroids can be a dangerously misleading idea."

He stresses the need for different business models: "Operators will need to think very carefully about issues like service pricing, business agreements with other operators, business agreements with service providers, and relationships with third party content providers."