issue 1 - Roland Berger

a global average of 30 billion sms messages are sent every month
business culture f
DeTeMobil, which evolved into T-Mobile,
failed to take its own development seriously.
During the test phase the service was offered
free of charge for almost a year. That is hard
to believe when one considers that today
mobile communications providers make billions
from SMS—with the trend rising.
In only 10 years, cell phones and SMS have
dramatically changed business communications.
Among business associates and partners,
giving someone your cell phone
number is a sign of trust, of “I’ll be there
when you need me.” The cell phone—and
with it SMS messaging—have become essential
management tools. Whether important
documents relating to a contract need to be
forwarded, a phone conference coordinated
or a small gift sent to a customer, today all it
takes is a short message and everything is
taken care of.
Cell phones are also becoming more and
more important for intra-company communications.
Now service and sales employees are
almost exclusively connected to their head
office via mobile phones. Teams can be managed
via SMS and can be fed all the available
information on a client. SMS enables users to
solve technical problems, request sales aids
or order replacement parts on-site, significantly
reducing response times and increasing
customer satisfaction. They present
potential for optimization that far too few
companies are currently taking advantage of.
An innovation developed by Roland Berger
Strategy Consultants demonstrates what a
modern employee communications tool can
look like. The consulting company updates
its consultants via a mobile news channel
every two weeks on company-related information.
Employees get a subject overview
via SMS together with a telephone number
they can use to retrieve the news. All they
have to do is make the call, get authorization
and listen to the report.
Just as fundamental as the changes in the
business world are those taking place in the
private sphere. People who cannot be
reached or have turned off their cell phone
are cut off from their friends and associates.
Communication has also changed. Stressful,
awkward phone conversations are often
bypassed with an SMS, the dialog reduced to
brief, telegram-like phrases. BBC Online
recently asked whether SMS shorthand has
become mightier than the written word.
People responded from around the world
with literary quotations, such as “w8ing 4 go.”
(“Waiting for Godot”) and “2b/-2b” (“to be or
not to be”), shortened hymns, such as “Gd $ th
Qun” (“God save the Queen”), and lines of
prayer, such as “dad@hvn” (“Our Father who
art in heaven”). Teenagers have a particular
fondness for communicating cryptically via
SMS. While philologists have been speculating
on the likely consequences of this, the
advertising industry has long recognized it as
an opportunity. With 14 to 30 year-olds so difficult
to reach via traditional print and
advertising media, the cell phone has proven
a powerful marketing tool and sales channel.
SMS—three letters that changed the world. The
massive hit with teens is also a valuable business
communications tool. Machines, too, are starting
to communicate via SMS, a phenomenon heralded by
the soda machines at the 2000 Expo, which could
send updates on their contents and refill status.
Coca-Cola in Belgium, for example, increased
sales of its 200 milliliter bottles in cafés by
8 percent during a 2003 SMS campaign. Even
Gossard, the women’s underwear manufacturer,
received 75,000 euros worth of orders
via SMS when it introduced a new range in
Great Britain—those interested had merely
to send in the code word “G4me.”
Thanks to the international acceptance of
GSM technology and numerous roaming
agreements, users can send SMS messages
and make mobile calls in more than 40 countries
spread over all continents. Market penetration
figures offer confirmation of the huge
growth potential still to be tapped. Penetration
has visibly increased since 1997, but is
still only 24 percent worldwide. Western
Europe is at the top, with 83 percent and
400 million registered cell phone numbers,
ahead of North America with 60 percent and
200 million connections. In terms of sheer
quantity, the Asia-Pacific region has the
greatest number of cell phones. Put another
way, 500 million customers there represent a
market penetration of only 30 percent.
Experts estimate that in 2004, 1.4 billion cell
phones will send more than 360 billion SMS
messages. Interestingly, Sweden already has
more cell phones than inhabitants, with 8.8
million people owning 9.1 million phones.
With technology having paved the way for
even niftier features, no end to the boom is in
sight. Users can now send photos between
cell phones via the Multimedia Messaging
Service (MMS). And the arrival of new messages
is increasingly announced with a few
seconds of a pop hit or famous piece of classical
music, with customers over the past year
spending $3.5 billion worldwide on customized
ringtones. However, there is one
thing that has not changed in mobile communications
over the past decade: whether
your mobile phone rings with a chirp or the
first few bars of Beethoven’s Ninth, there are
times when it would be great to be able to
just switch the thing off.
think: act 57