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European consumers are shunning next generation wireless data services in their droves.

Newly launched messaging services such as Multimedia Message Service (MMS) and Instant Messaging (IM)
will not reach double-digit (10 per cent) penetration before 2007, according to market research firm In-Stat/MDR. The prospects for 3G services, which are launching during a seemingly unending telecom slump, look grim, it concludes.

"Wireless IM, which provides a person's presence availability for correspondence, has a real potential for SMS cannibalisation in Europe," says Ken Hyers, a senior analyst with In-Stat/MDR. "However, while the demand for wireless e-mail, SMS, and, potentially, IM is clear, interest in new and future messaging services, such as Enhanced Messaging Service (EMS), is not."

Network upgrades and improvements, and messaging friendly devices will be the most crucial developments for success in the messaging industry.

To a large degree, data success for the operators rests in the handset makers' hands, the analyst group argues.

According to In-Stat/MDR SMS Mobile Originate (MO) message volume and revenue will peak in 2003, before declining to approximately $3 billion in 2007.

However, SMS will not be overtaken by another messaging format before 2006, when Wireless Instant Messaging (IM) and Multimedia Message Service (MMS) will take the lead.

Initial demand for MMS has the most potential among business people, who normally have a higher monthly
disposable income. The average tariff per message, in 2003, is approximately $0.40. This is expected to decline to approximately $0.17 in 2007, according to In-Stat/MDR.

In-Stat/MDR's report The Best Has Yet to Come: Wireless Messaging Models for Europe gives an overview of the market for wireless messaging services in Europe until 2007. More information on purchasing the full report, which costs $3,995, can be found here. ®

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