MSN, Orange in deal for SMS

AMSTERDAM: MSN, Microsoft's Internet services arm, signed up French mobile carrier Orange in the biggest deal yet for its Hotmail and MSN Messaging service to mobile phones.

In the deal with Orange, MSN gains access to 35 million potential customers in six countries, taking the total to 105 million mobile phone users in 13 countries who can get email and instant messages from the Web forwarded to ordinary handsets in the form of short text messages (SMS).

MSN launched the Hotmail and MSN Messenger to SMS service last year, but only recently broke into the big European countries Germany and Britain. The deal with Orange means MSN now has access to France's mobile phone users where Orange has about half of the market with 19.2 million mobile subscribers.

"Orange made the service available in Switzerland and the Netherlands a while ago to evaluate it. They were happy with it and extended the deal," said Vassili le Moigne, MSN's mobile business manager. Orange's main operations are in France and Britain.

The MSN to SMS service was first launched in Europe where text messaging is a standard feature on all cellphones. MSN to SMS is a service in which cellphone users pay for messages they receive and send from their handsets.

The service is aimed at users of MSN services who want to be alerted when new email arrives or who want to keep receiving MSN messages from buddies behind computers. Hotmail is the world's largest free email service with tens of millions of users in Europe, while MSN Messenger has 13 million users in Europe.

For mobile carriers SMS is a lucrative cash cow, generating between 10 and 15 percent of total revenues, and has fat profit margins because the 160 character messages hardly use network capacity. Increasing SMS traffic is a key objective for most.

"We expect increasing stimulus to average revenue per user (from the MSN deal)," said Ian Germer, director of enablers at Orange in London. The service will be immediately available in Orange's Western European markets, except in France and Belgium where the service will come online later this year. Orange's Eastern European markets might follow later, Germer said.

© Reuters