AT&T Wireless aims for chat users

America Online Inc. (AOL) has reached a deal with AT&T Wireless Services Inc. to embed its AOL Instant Messenger (AIM) and ICQ chat software on some of the operator’s mobile phones, in a move aimed at simplifying instant messaging (IM) services for users.

The embedded IM feature is currently available on the Nokia 3100 and 3200 handsets, the companies said Tuesday, with plans to make it available on more phones throughout the year.

The IM services appear as a feature on the phones’ software, just like the phonebook and text messaging options, the companies said. By having the services embedded on the phones, users will be able to more quickly locate and use the services, they said.

AT&T is charging $0.10 per message sent, and incoming messages are free.

AOL’s instant messaging services were already available to AT&T’s customers via SMS (short message service) text messaging and through AT&T’s mMode service. The IM-to-text service allows users to send an IM from their desktop to an AT&T Wireless user by addressing the text to a phone number. The AT&T Wireless users could then respond. This service is only available to users with two-way text messaging capable phones.

“The IM over SMS service doesn’t work very well because it jams two forms of communication together … it’s not very natural,” said Joe Laslo, senior analyst at Jupiter Media in New York. “IM seems like something you’d like to have as an application on your phone,” he added.

Laslo said that he thinks AT&T could do well with the embedded service, enabling it to increase per-user revenue if it gets the pricing structure right. He thinks that users would be more comfortable with flat-rate plans rather than per-message pricing.

“There’s the potential for real sticker shock,” he said.

As for AOL, he believes that the deal puts the company in a good position to spread its service to mobile users. AT&T Wireless had nearly 22 million subscribers in the U.S. at the end of last year.

Laslo believes that carriers will be willing to sign up with all the main IM providers, however, so as not to shut out users.

“It’s in their interest to be IM agnostic but it makes sense to start out with the largest provider — AOL,” he said.

IM over mobile phones is still a developing market in the U.S. According to a study conducted by Jupiter in December, only 5 percent of users surveyed had sent IMs over their cell phones, while 36 percent had used text messaging. Eight percent of those surveyed had checked their e-mail over their mobile phones.