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By Carsten Brinkschulte, CEO of Synchronica

Royal Tunbridge Wells, October 12, 2010.– Using her mobile phone to reply to an email in the Afghan city of Herat, you would be forgiven for thinking that Saaman Hakim is a high-powered business woman with a BlackBerry device. In fact, Saaman works as a cashier at the Baharistan Hery Hotel, and she relies on her Nokia 3300 to access her MTN Mail account.

MTN Mail is MTN Afghanistan’s branded push email service. It is one of a number of initiatives taken by the country’s mobile operator to boost data usage and supplement voice revenues in an increasingly competitive market. Importantly, MTN Afghanistan targets the service to the enterprise, as well as the consumer segments, and has kept it accessible by ensuring compatibility with any handset connected onto their network.

MTN Mail represents an emerging trend that is being taken by a number of mobile operators around the globe – putting a BlackBerry-type service into the hands of their greater subscriber base.

Leading analysts predict that mobile email including access to calendar and contact information will become the key driver of growth in mobile data services. Mobile operators are discovering that mobile messaging which had previously only been targeted towards hardnosed business executives can also be easily positioned as a lucrative consumer product.

And so we return to MTN Mail. In a country notorious for low broadband penetration, does Saaman rely on her mobile phone to send and receive email because it’s the only way she can? Or have the powers that be at MTN cleverly identified a massive gap in their market waiting to be exploited? Perhaps.

With 90 trillion emails sent in 2009 to 1.4 billion email users worldwide, it is easy to see mobile messaging as an enriching, convenience-bringing resource. More and more people worldwide are buying themselves mobile phones – and with mobile phones comes messaging, too.

Synchronica believes that the mobile phone is becoming the preferred channel for consumers in emerging markets to access digital content. According to the Program for Developmental Entrepreneurship, an initiative sponsored by the Massachusetts Institute of Technology (MIT), a developing country’s gross domestic product (GDP) increases 0.6 percent whenever ten mobile phones per 100 people are added.

In many developing countries, the mobile phone provides an accessible, cost-effective alternative to internet cafes. Crucially, mobile telephony is regarded as a tool to self-empowerment – providing reliable coverage to many across vast geographical areas, allowing users to educate themselves, stay on top of important world events, and even conduct business.

This is the gap that Synchronica aspires to fill with its flagship Mobile Gateway product. This award-winning mobile messaging middleware powers MTN Mail, in addition to similar offerings from 29 mobile operators worldwide.

Mobile Gateway is best known for innovatively combining Push IMAP and SyncML with Email to SMS, Email to MMS, and WAP Push, to support literally any handset in the market today – in the best possible way for any given device.

The ability to extend advanced messaging services to any mobile phone is a compelling prospect for operators in emerging markets where the vast majority of subscribers earn as little as USD 3 each day and own a basic mobile phone that lacks mobile browsing features.

Push Email, Instant Messaging, and Social Networking for Every Mobile Phone

This year, Synchronica unveiled its most ambitious upgrade to Mobile Gateway ever. In addition to providing push email and synchronization, Mobile Gateway 5 now provides a complete next-generation mobile messaging solution that allows operators to extend instant messaging (IM) and social networking services (SNS) to any subscriber, regardless of the type of handset they use. Additionally, customers can receive updates from thousands of online news and entertainment services, using the built-in web feed reader of Mobile Gateway 5.

Maintaining its device-neutral and platform-agnostic approach, Mobile Gateway 5 enables operators to increase data traffic and subscriber loyalty by providing a broad range of mobile messaging services from a single platform. It allows users to connect to existing internet communities to drive traffic and user uptake, but also allows operators to create their own email services and instant messaging communities, creating the churn-reducing stickiness which they crave.

In an Instant â?¦

Allowing mobile phone or computer users to send realtime messages amongst each other, instant messaging continues to grow as a fast and interactive method of online communication. Already highly popular amongst 16 to 30 year olds, industry analysts believe that within two years, 1.6 billion people worldwide will rely on their mobile phones to access an IM service.

But until now, handset compatibility has been the single greatest barrier to doing so. Capgemini revealed in an early study that 19 percent of the mobile subscribers who said they would be interested in subscribing to mobile IM owned a handset which could not support the service.

However, thanks to recent handset standardization and Mobile Gateway 5 supporting the OMA IMPS and XMPP standards, a greater amount of people are now able to access their IM accounts from their current mobile phones.

Mobile Gateway 5 allows operators and device manufacturers to aggregate multiple IM communities, from Google Talk to Facebook Chat, but more importantly, operators can use Mobile Gateway’s built-in XMPP server to create their own IM community, regain control of their subscriber’s identities, increase data revenues, and combat churn.

Mobile Gateway 5 supports all of the features associated with conventional IM. Emoticons or smileys visually express emotions while buzzes and nudges alert those who have stopped chatting to you. Finally, IM has developed its own lingo, and while the world nudges and buzzes from phones, phrases like BRB (be right back) will @TEOTD (at the end of the day) become accessible to all.

Social Uprising

“What are you doing?”, asks Twitter that receives 40 million answers each day from a legion of 75 million tweeters which include celebrity names, such as Britney Spears, Yoko Ono, and Barack Obama. The unprecedented global success of social networking is well documented.

Facebook, for example, has a staggering 400 million users from every continent, with a rapid increase coming from key emerging economies. Almost half of its users access the service daily in 35 different languages. Courtesy of social networking, tweeting, poking, and connecting are fast becoming mainstream terms in everyday conversation.

Social networking is by no means a phenomenon limited to the West. The use of social networking within emerging markets is exploding. In a recent study, ComScore reported that the greatest year-on-year growth of registrations came from the Middle East and Africa (66 %) and Latin American (33 %) regions.

Mobile Gateway 5 uses the built-in messaging clients found on a wide range of feature phones or MMS and SMS for entry-level phones to provide push social networking to a wide range of popular services including Facebook, Twitter, and LinkedIn. With Mobile Gateway 5, users can get the latest news from their contacts, upload and share photos, send and receive wall posts using their existing mobile phones, and chat online with other Facebook users.

As It Happens

On the evening of 26 November 2008, a Mumbai-based student used Twitter to announce “4 policemen killed in attacts [sic]”. What followed was an estimated 16 tweets each second as hundreds of eyewitnesses in the city provided live commentary of the drama that was unfolding around them.

News agencies, such as the BBC, syndicated these tweets via live updates pages enabling millions to have minute-by-minute updates pushed directly to their RSS clients.

Mobile Gateway’s built-in web feeds connector provides subscribers with live updates from any website that supports RSS feeds, sending them as emails to any mobile phone. In Synchronica’s target market of emerging economies, Mobile Gateway’s web feeds connector is a compelling source of news and information.

According to research from Yahoo, sign-on levels to RSS services is growing – world news being the most subscribed, followed by entertainment services and weather or traffic information. Using Mobile Gateway’s web feeds connector, operators can extend realtime access to literally thousands of news, sporting, and entertainment services – generating recurring revenue streams and increased data traffic.

Donning Their Armor

Over the past few years, premium device manufacturers, such as Apple, RIM, and Nokia have been increasingly pushing device-specific services as a means of establishing direct relationships with end-user subscribers. The BlackBerry Messenger, Apple’s App Store and MobileMe, Android’s Marketplace, Gmail, Google Talk, and Nokia’s OVI and Nokia Messaging services are especially aggressive, threatening to relegate operators into nothing more than dumb bit pipes that have little differentiation beyond their speed of data transmission and what they charge per megabyte.

If premium-brand device manufacturers succeed, operators will find it difficult to improve their competitive position, resulting in uncontrollable increases in subscriber churn and exposure to cut-throat price wars. Operators can mitigate this threat with a bouquet of operator-hosted, device-neutral value-added services and operator-branded devices.

Mobile Gateway is a key weapon for operators to enrich their messaging portfolio and reduce churn rates because subscribers become dependent on a service that would be lost if they were to defect to a competing operator. Mobile Gateway is provided as a white-labeled solution, allowing operators to brand, price, and position as they see fit. As an effective tool to plug the pipe, Mobile Gateway is especially relevant to operators in emerging economies where internet services are less readily available and subscribers yearn for access to online messaging communities.

In Africa, for example, the rate of household broadband penetration was just 2.26 percent at the end of September 2009. In these regions, bandwidth is an expensive commodity because the wholesale cost typically exceeds what is charged in developed markets.

While an E1 (2 Mbps) internet bandwidth link can be leased by operators in the United Kingdom at a monthly cost in the region of USD 450, Nepal Telecom pays between USD 3400 and USD 14,800. This variation in pricing is standard across much of the developing world, and given the price sensitive nature of subscribers within these regions, operators find it impossible to simply increase their mobile data tariffs.

When combined with the capital cost of adding additional radio equipment onto the network of base stations, operators in emerging economies have little choice than to seek efficient alternatives to services which squander bandwidth.

In the West, mobile data is increasingly sold as a flat-rate data tariff, encouraging subscribers to make full use of bandwidth-greedy applications. T-Mobile’s European and American subsidiaries, for example, record severalfold bandwidth increases each year amongst subscribers who own data-hungry mobile devices.

“Every iPhone user”, announced Deutsche Telekom’s Chief Executive Officer René Obermann at a 2009 shareholder meeting, “spends 60 times more time on the mobile internet than the owner of a standard [mobile] phone.”

Similarly, as a result of the demand placed on its EDGE network in 2008, the American operator AT&T experienced a widespread overload that affected all subscribers in the northeast states. This prompted AT&T to embark on an expensive investment in deploying additional network equipment.

Operators who have to contend with low margins – especially operators in emerging markets – can ill afford to sustain business models of this type.

As a standards-based mobile messaging solution, Mobile Gateway removes the need for the user’s handset to maintain a permanent data connection, aiming to limit the consumption of network bandwidth to an absolute minimum. Mobile Gateway supports the OMA EMN standard, sending an invisible SMS trigger to prompt the phone to retrieve new emails. This improves battery life, so customer satisfaction is maintained, and calling revenues are not jeopardized.

More importantly for mobile operators, OMA EMN reduces the number of simultaneous data connections and load on network base stations, so a larger number of mobile email users can be accommodated without the operator needing to invest in the expansion of network capacity.

Similarly, Mobile Gateway’s transcoding engine helps to improve network efficiency. It allows email attachments to be accessed from mass market mobile devices by converting and reducing the size of attachments to match the screen of the handset, dramatically reducing data traffic across the network.

In February 2010, Synchronica and its partners Brightstar and KC Mobile, announced MessagePhone – a messaging-centric, white-labelled handset that is bundled with a complete suite of infrastructure services to provide a comprehensive and affordable mobile messaging and internet experience for users across Africa, Latin America, Eastern Europe, and Southeast Asia.

MessagePhone – The Low-Cost, Messaging-oriented Handset

MessagePhone is an integrated device and service solution powered by Mobile Gateway that delivers smartphone-like functionality and messaging services at a fraction of the cost of competing solutions. Designed for users in emerging markets, the solution allows operators to regain control of their subscriber base by branding and owning the services as they wish.

For subscribers, MessagePhone could become the user’s first and primary internet device, potentially replacing the traditional internet cafe. MessagePhone is a great phone with a large screen and QWERTY keyboard and has full internet access, push email, synchronization, instant messaging, connectivity to social networks, and retails for less than USD 100.

The MessagePhone solution, according to research by Informa, provides operators in emerging markets with a significant addressable market that can help them to win the battle against premium device manufacturers and the threat of becoming a dumb bit pipe. The device-centric solution provides benefits to operators desperate to offset falling voice revenues by increasing the size of revenues generated from data services and to retain existing customers at a time when users are becoming more fickle.

In addition to fully supporting Mobile Gateway 5, MessagePhone also provides additional features which enhance the user’s experience and conserve network bandwidth. A built-in e-book reader allows users to download and read more than 30,000 plain text royalty-free e-books.

An FM radio also included with MessagePhone provides free high-quality broadcast entertainment as a substitute to bandwidth-hungry online streaming services.

Finally, MessagePhone’s built-in Bolt web browser quickly and accurately displays web pages just as they would appear on desktop computers, with faster load times and bandwidth consumption at a fraction used by traditional mobile browsers courtesy of over-the-air data compression.

MessagePhone has been designed from the ground up to provide operators in emerging markets with a low-cost, yet high-quality, full-featured messaging device. Brightstar has already received orders from two major mobile operators, and Synchronica is confident that MessagePhone will appeal to a broad cross section of operators in emerging markets.

Next-Generation Mobile Messaging for Next-Generation Consumers

Most mobile users agree that mobile telephony has positively influenced all aspects of life by connecting them to customers, relatives, and friends, helping with access to information, creating business opportunities, lowering transaction costs, and enhancing social interaction. But as subscribers around the world become more sophisticated in their needs, mobile telephony transcends simple voice and SMS. The mobile phone is evolving into a truly ubiquitous social tool.

Social networks and online communities have grown to become the garden fences of the 21st century and are popular and established community meeting places. In Africa, internet-enabled handsets are used to access mobile websites, with page views shooting up 374 percent between November 2008 and November 2009. In some countries, such as Kenya and Zambia, hundreds of pages are accessed each month as handsets are often used by more than one person to get online, allowing those who do have not have their own data-enabled phone to access the internet on a regular basis.

Mobile Gateway 5 which provides push email and synchronization, instant messaging, access to popular social networking services, and connectivity to web feeds democratizes mobile messaging. Any subscriber can use Mobile Gateway with any mobile phone to connect to her favourite communities, to stay in touch with her loved ones, and to nurture business contacts. Synchronica built this next-generation messaging solution with the next-generation of consumer kept firmly in mind.

About Synchronica

Synchronica plc develops and markets synchronization and device management solutions for mobile operators, device manufacturers, and enterprises. Its product portfolio ranges from data synchronization (DS) to device management (DM), and firmware updates over the air (FOTA). Products include the mobile device management product set Mobile Manager Suite and the push email and synchronization solution Mobile Gateway. Headquartered in the U.K., with a development center in Germany and presences in the USA, Hong Kong, and Dubai. Synchronica plc is a public company traded on the AIM list of the London Stock Exchange (SYNC). More information is available atwww.synchronica.com

For more information, please contact:

Nicole MeissnerChief Marketing OfficerTel.: +44 1892 552 780Mobile: +44 7977 256 412Fax: +44 1892 552 721

nicole.meissner@synchronica.com

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