Even though the inter-carrier dilemma is resolved, barriers remain, according to Linda Barrabee, senior analyst, Yankee Group. U.S. consumers pay "a flat rate for a lot of minutes, so the low-cost of voice calling is competing with a new text messaging service that might not be very friendly to use."
Yankee Group projects that by year's end, about 9% of all wireless phone consumers in the U.S. will be using SMS, compared to 208 million SMS users in Europe or about 65% of the total wireless base of 319 million. Currently, about 300 million messages are sent each month in the U.S., according to consultant Zelos Group, compared to about a billion a day in the U.K.
Seamus McAteer, principal analyst at Zelos, said SMS isn't likely to be a big source of ad revenue for U.S. carriers not only due to lack of scale, but also because there are limits to what a marketer can do on a small screen.
Some are trying. AT&T Wireless is poised to sponsor "American Idol" on News Corp.'s Fox. The effort will involve subscribers using its service to vote on finalists and perhaps download short codes to get access to quizzes.
For the release of Sony Pictures Entertainment's "XXX," Adversoft, a San Diego-based mobile-marketing company, created a "Mobile Agent Campaign" where 9,000 users registered for a chance to win ring tones. Users answered questions on their handsets based on viewing the film's trailer online.
Another division, Sony Pictures Digital Entertainment, recently struck a deal with Deutsche Telekom's T-Mobile to deliver Sony content to its wireless subscribers. Consumers download TV and movie-related content, games and ring tones from T-Mobile's Web site for a nominal fee.