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Vodafone caves in to Microsoft IM

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Comment Among all of Microsoft's announcements at the 3GSM show was buried a piece of news that almost certainly means the end for the unification of cellular instant messaging efforts around a GSM Association standard.

Exactly a year ago at last year's 3GSM show, 15 operators led by Vodafone, Orange, T-Mobile, China Mobile, O2, Telefonica, and Turkcell, who covered over 700 million mobile phone users, said they would develop a single Instant Messenger application that would mean that as SMS messaging is replaced by IM, then most operator networks would be in sync with each other and able to swap messages.

The real reason behind that standard, which appears to be stillborn with the announcement that Vodafone will use a Microsoft developed system, is because cellular operators wanted to remain immune from the dilution of SMS revenues, that a third party hosted IM might trigger, which might have taken as much as 20 per cent of most operator's profits away at a stroke.

Around the same time last year every one of the major IM offerings including Yahoo, Microsoft, AOL, Google and Skype all announced initiatives to put their IM services onto handsets, mostly with US based Cellcos. But now it appears that Microsoft will both host and develop the Vodafone system.

Vodafone and Orange were at the heart of last year's IM announcement and were said to be extremely keen to be the first to get IM interoperability working on their devices, while Orange wanted to offer a common IM service between Orange customers and Wanadoo broadband customers.

That same convergence pressure will emerge throughout the development of any quadruple play, where an operator has both broadband customers and cellular customers, it will want them to be able to talk together with text based messages at least, and full IM capability if possible. Vodafone of course is one such operator that is embarking on a full quadruple play roadmap, beginning with the introduction of bundles in Germany with the ISP it owns there and a deal in the UK to wholesale BT broadband lines.

Now it looks like Microsoft will even host the Vodafone IM traffic. With Vodafone and Orange no longer supporting the IM consortium that was launched last year, deserting the independent IM idea, it's now unlikely that anyone will continue with it, especially since the idea was supposed to be ready during 2006, and nothing has been heard of it since.

When Orange first said Microsoft was helping it with its IM service, it tried hard not to say that it was embracing the Microsoft code base and the fact that it did has only just become obvious.

The main difference between SMS and IM messaging is real time delivery, which 3G networks are more than capable of handling now with increased total bandwidth and lower latency. IM, as opposed to SMS, would mean that interfaces could be developed which arrange messages into separate conversational threads rather than in strict order of arrival and IM traffic can be opened up to groups, not just between two individuals.

In the US, where texting is not so prevalent as in Europe and the Far East, instant messaging services have been largely outsourced to AOL and Yahoo. IM is now seen as replacing the Multimedia Messaging Service, which has failed to replace or even augment SMS revenues, partially because it really needs the connections with the existing IM world of PCs.

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