Partnership a nod to African needs
Informa Telecoms says the new partnership between Google and Orange acknowledges Africa's connectivity needs.
Commenting in Orange’s partnership with Google, Informa Telecoms & Media senior analyst for messaging, Pamela Clark-Dickson, says it is an acknowledgement by both parties that those who live in emerging markets are just as interested in accessing Internet services as those who live in developed markets.
She says by enabling Gmail Chat via SMS, Orange and Google are also acknowledging that SMS is a key delivery channel for Internet services in emerging markets, where there is low penetration of Internet-enabled PCs and of Internet-enabled mobile devices.
Informa Telecoms & Media states that there were 577.6 million mobile subscribers in Africa and another 226 million mobile subscribers in the Middle East at end-2Q11, equating to penetration rates of 54.7% and 93.5%, respectively. However, Informa also forecasts that the penetration of smartphones in Africa and the Middle East by end-2011 will be just 11.3% and 19.8%, respectively.
Clark-Dickson says the partnership delivers mutual benefit to Orange and Google: Orange will generate additional traffic and revenues from the SMSes sent by those of its subscribers who use the Gmail SMS Chat service and by those of its customers who reply to the chat messages, while Google will secure additional market reach. For example, Gmail SMS Chat users will be able to add Orange mobile customers who are not Gmail SMS Chat users to their address books/buddy lists, which may in turn encourage non-users to sign up for the service themselves.
Orange has not disclosed whether it will share messaging revenues with Google, but it is unlikely to do so. Instead, Orange is offering Google the opportunity to provide other services to its subscribers, and Google may well be able to charge for these or to secure a share of the revenues generated by these services.
Orange and Google have already had some success with Gmail SMS Chat: Orange stated that the service attracted 700,000 unique users in Senegal within the first six months of its launch in Jul. 2010. Between them, these users sent four million Gmail SMS Chat messages.
She says: “It is possible that Gmail SMS Chat can achieve a similar level of success in the other African countries in which Orange and Google propose to introduce the service, which is also already available in Kenya and Uganda. The potential addressable market for Gmail SMS Chat is significant: Orange has operating companies in 19 countries in the Middle East and Africa, and has a total subscription base of 60 million across these markets. Initially the operator has only named five other markets in which it will launch or trial Gmail SMS Chat, though it expects to roll the service out across all 19 OpCos.”
Informa notes that Orange is not charging its subscribers a subscription fee to access Gmail SMS Chat, nor will it place a premium on the SMS chat messages, which will help to make the service more attractive. In fact, to provide even more incentive, Gmail SMS Chat users receive a quota of free SMSes (Google states on its web site that Gmail SMS Chat users receive an initial quota of 50 messages), which is renewed with an additional five free SMS messages every time an Orange customer replies to a chat message.
The company adds that Orange and Google are not alone in seeking to provide SMS-enabled Internet services to mobile subscribers in Africa; companies such as ForgetMeNot have been doing so for a couple of years. ForgetMeNot, for instance, enables SMS-based e-mail, instant messaging and social networking for operators in Kenya, the Republic of Congo, Zimbabwe, Lesotho and Nigeria. Although such companies do not have the scale of Orange and Google, they are agnostic in terms of the services that they do enable, which can be a potential differentiator for mobile operators.
Also, Google provides Gmail SMS Chat via another 29 mobile operators in Africa and the Middle East, so the availability of the service is not exclusive to Orange OpCos in these regions.
Recent Internet News
The Great Disruption16 Dec